Nadex (North American Derivatives Exchange) is a US-based, retail-focused, CFTC regulated exchange that offers Binary Options, Call Spreads, and Knock-Outs, making it our top choice for US traders. Nadex is a registered trademark of IG Group, Ltd, a prominent international provider for CFD trading, Spread Betting, and Share Dealing. The company headquarters are based in Chicago, Illinois, and subject to US law. Nadex’s legal information is completely transparent and easily available on their website.
Editor’s Note – Why Nadex DOESN’T Suck in 50 Words
Nadex is one of only a few legally operating, CFTC regulated, binary options exchanges based in the US (Cantor Exchange is another worth mentioning). This means a number of things for both US-based and international traders (Nadex accepts accounts from various countries around the world). First and foremost, it means CFTC oversight, secure withdrawals, and access to all the top assets you have come to know and love.
Why Nadex Might Suck
You might not like Nadex because it is not the same as the trading you remember from old off-shore binary options brokers. The platform may be a bit more complicated but this also means it offers more capabilities and functions than other platforms, which opens the door for more opportunities.
Is Nadex A Scam?
Nadex is a US exchange regulated by the Commodity Futures Trading Commission (CFTC). Nadex is NOT a scam, but the real thing. For further reference, see the CFTC Fraud Advisory announcements on Binary Options.
However, Nadex has had its fair share of complaints and unsatisfied customers, thus we recommend caution but then again, you should always be cautious, no matter how many regulations a broker has and no matter how good they are. And as always, make sure you understand their Terms and Conditions so you can avoid unwanted problems.
Should I Open an Account with Nadex?
Nadex offers several types of trading instruments on their proprietary, web-based trading platform – Binary Options, Call Spreads, and Knock-Outs:
Nadex Binary Options are financial instruments that turn every trade into a simple question: will this market be above this price at this time? Binary options are based on the 0-100 model and are bought and sold in lots. This means if a trade expires OTM (Out of The Money), it is worth nothing. If a trade closes ITM (In The Money), it is worth $100. Please note that your profit or loss is reflective of what you paid to place the trade, including fees. You can click here for more on how to trade Nadex Binary Options.
Nadex Call Spreads are a single contract with a floor and a ceiling range. The floor represents the biggest risk associated with a trade, and the ceiling represents the largest gain a trade can bring. If the contract expires below the floor, you will lose the collateral used to secure the trade. If the contract expires above the ceiling you will realize the maximum profit potential and if the trade expires in between the floor and the ceiling, your profit would be the difference between where you entered the trade and where it closed.
Nadex Knock-Outs enables you to make trades based on price action within a predefined price range. Each contract has a floor and a ceiling offering a natural price target with known risk and reward. Knock-Outs track the movement of the underlying market price. If the underlying asset touches either the floor or the ceiling of the Knock Out, then the contract expires immediately. That way you know maximum profit targets and the maximum risk if your trade goes against you. And, you can always place an order to close a position prior to expiration.
The asset list at Nadex is pretty good. Not as large as others I have seen, but the good news is that it is growing all the time. There are currently 8 major indices, 11 Forex pairs, commodities from 3 major classes (metals, agriculture and energies), and a few Economic Events contracts to choose from. Indices include the major US, European, Japanese and Chinese markets. All the major Forex pairs are represented, as well as commodities including gold, silver, copper, oil, natural gas, soybeans, and corn.
Expiry is where you might get a little confused but don’t worry, it’s not too difficult to understand. Each asset has a list of set expiry times which can range from 5 minutes to intra-day, to end of day and end of the week. You can hold your binary options until expiry and get your expected return, or you can sell it at any time beforehand that you choose.
Overall Nadex looks like a great trading partner but also one of the very few choices if you are living in the U.S. and want to deal with a regulated broker/exchange. Some offshore brokers accept U.S. traders but their number is low and finding one with a solid reputation is rather difficult. That being said, we consider Nadex a very good choice but ultimately you will have to decide if this broker suits your needs.
Nadex is located at 200 West Jackson Blvd, Suite 1400, Chicago, IL 60606 and can be contacted at phones: International: +1 312 884 0100; US Toll-Free: +1 877 776 2339 or email [email protected]
Bitcoin Trading At Nadex
Nadex entered the cryptocurrency market with the addition of Bitcoin Call Spreads. So far they only have two Bitcoin contracts, one with a weekly and one with a monthly expiry, but we expect to see them add more as cryptocurrencies gain wider acceptance. The call spreads are a bit different than the standard binary option, but still, are very easy to trade. You can sell your position to lock in profits or cut losses at any time you want.
The name “spread” comes from the fact that there is an upper and lower limit to prices, that is the spread. The limits cap gains and losses, but profits are based on the amount of pip movement in the underlying asset.
Nadex gets its share of complaints, but which exchange/broker doesn’t. Most complaints are from traders who aren’t allowed to join, traders who fail to understand the system and traders looking for more services. However, we did manage to locate a few complaints about Demo being different from Live and some about failed withdrawals because the client failed to provide verification documents.
Nadex does not offer any promotions or bonuses at this time. In the past, they have run some limited fee-free promotions.
Nadex has fast withdrawals. They can be made by wire transfer, ACH transfer (the US only), and debit cards (the card may need to be verified prior to requesting a withdrawal). Wire withdrawal requests received before 4:15 p.m. ET are processed the same day; ACH withdrawals are returned to your account within 3-5 business days. Wire withdrawals incur a $25 processing fee.
An asset class that’s an Extra on its own is Economic Events. These are options placed on economic events like the weekly jobless claims, monthly NFP numbers, and others. To win, you will have to predict the actual numbers of the release or report, so it can get tricky but probably worth a look.
The Nadex mobile platform, NadexGo, is great. It is a Progressive Web App (PWA) that automatically updates itself in real-time, so it is always functioning at its best. It includes charts, trading, and more. It’s fast, intuitive, and well-designed.
User Friendliness – 15/20
This is not the most user-friendly platform you will find. First off, it is not that simple to join. When you get on the platform you will find navigation a little confusing, but once you get a grip on it you will have no trouble with using Nadex trading platform. U.S. traders are accepted, of course, mobile platforms are available, as well as Demo accounts.
Number of Assets and Expiry – 18/20
Nadex doesn’t have too many assets, but it does have all the ones that matter most: 8 indices, 11 currency pairs, metal, energy and agricultural commodities, and economic events (speculate on the outcome of major economic events such as the Non-Farm Payrolls, GDP, etc.). Expiries range from 5 minutes to one week, which means that you won’t be able to trade extremely long expiries such as monthly or yearly but Nadex is focused on short term trading, so these expiries are suitable.
Commissions, Support And Effective Returns – 19/20
Nadex has another difference from other brokers/exchanges – it charges small fees… but they are really low compared to what CySEC-style brokers keep when you profit. Nadex charges a $1.00 per contract if the entry/exit is done before expiration or if the expiration is ITM. If you hold the position until expiration and it closes OTM (zero), then you will not be charged a settlement fee. Support is really good, they have a full staff available to answer your questions and help get you started. Effective returns can be really good, too.
Deposit, Payment and Bonus – 19/20
Nadex is the best exchange for any traders to deposit with (they allow accounts from various countries all over the world). Payments (withdrawals) are fast, usually made within a few days of your request, provided the funds are available within your account and there are no verification issues to tie up your account. Withdrawals can be made via ACH transfer, debit cards and wire transfer; the latter incurs a $25 processing fee.
Broker Extra’s – 19/20
There really isn’t one thing specifically that is extra about this exchange, except for the whole thing. For one, it’s not a “broker”, it’s an exchange. It has a vested interest in providing safe and legitimate trading because it is in business to provide the platform, not to take the other side of your trades. For another, the freedom for you to buy or sell whenever you want makes them infinitely more flexible than any other binary broker on the market. Trading with Nadex allows you to potentially increase your profits while keeping your risk always under strict control.
NADEX Overall Ratings (90) + CFTC Regulated (+3) = 93/100
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