Nadex Review 2022.
The leading US trading Exchange. Nadex offer genuine exchange trading to US clients on Binary Options. Fully regulated by the CFTC.
Nadex Facts & Figures Bonus $100 Deposit Bonus Offer Instruments Forex, Binary Options, Knock Out™ Contracts, Call Spread Contracts Demo Account Yes Min. Deposit $0 Payment Methods ACH Transfer, Credit Card, Paysafecard, Wire Transfer Min. Trade $1 Regulated By CFTC MetaTrader 4 No MetaTrader 5 No cTrader No STP Account No ECN Account No DMA Account No Mobile Apps NadexGO Margin Trading No Auto Trading No Social Trading No Copy Trading No Trade Signals No Islamic Account No Forex GBPUSD Spread 0.25 pips Var EURUSD Spread 0.02 pips Var EURGBP Spread 0.25 pips Var Assets 101 Binary Options Payout Percent Exchange (See Full Review)
Nadex is a US-based exchange providing powerful trading tools and advanced features to traders of all experience levels. Nadex is not a brokerage, but a CFTC-regulated exchange.
Nadex focuses on trading in binary options, Knock-outs™ and call spreads on the most popular traded commodities, forex and stock index futures. This review of Nadex will evaluate all elements of their offering, including pricing, accounts and trading platforms – including NadexGO, the new mobile platform, before concluding with a final verdict.
A Brief History.
Before looking at the potential for day trading returns, it can help to understand how Nadex has evolved into the leading exchange of its kind.
The exchange was launched in 2004 and was originally known as “HedgeStreet”. The objective at that point was to create an electronic marketplace that facilitated trading in financial derivatives to retail investors.
However, by 2007 HedgeStreet closed its doors.
UK-based IG Group Holdings Plc. purchased the company and in 2009 HedgeStreet was re-branded the North American Derivatives Exchange (Nadex), with sophisticated new technology and instruments.
It’s worth highlighting that while the parent company is based in London and forex listed on the FTSE 250, binary options Nadex headquarters are in Chicago, Illinois.
Part of the improved product range saw a greater choice of binary options.
In fact, their binaries and call spread contracts cover an array of underlying markets, including commodity futures, equity index futures and spot forex rates. Furthermore, Nadex members can take positions on all of the following assets on:
Stock Index Futures – US 500 (S&P 500), Wall Street 30 (DOW), US Tech 100 (Nasdaq), US SmallCap 2000 (Russell 2000), FTSE 100, Germany 40 (DAX), Japan 225 (Nikkei), China 50 Forex pairs – EUR/USD, USD/JPY, GBP/USD, USD/CHF, AUD/USD, EUR/GBP, USD/CAD, AUD/JPY, binary options broker GBP/JPY, EUR/JPY, USD/MXN Commodities – Crude Oil, Gold, Silver, Copper, Natural Gas, Soybeans, Corn.
Traders are also able to benefit from a choice of expiration times, including intraday, daily and weekly expirations. The best Nadex trading signals therefore use this entire range.
But while using Nadex does mean you can start trading on just 5-minute forex or 20 minute stock index binary options, their product range does not include 60-second binaries or similar products, as some competitors do.
Nadex do add new products regularly, and Knock-out™ contracts are one such addition. The Knock-out™ is a contract that allows the trader to speculate on price movement of a market within a pre-defined range. The range is limited by the floor and ceiling prices.
Within these levels, the value of the contract will move in linearity with the movement of the underlying market.
The micro lot sizes of the new Knock-out™ contracts provide options to trade with low capital requirements. With the built-in floor and ceiling structure, whether long or short, the contracts provide pinpoint risk control.
No slippage and no nasty shocks. This provides the power of leverage with but with managed risk – The maximum risk on any trade is the only capital required to secure that trade.
Once the trade is open, binary options the capital requirements never change, even when held overnight, making these contracts as easy to swing trade as to day trade.
Minimum Initial Deposit.
Nadex welcomes traders by requiring just a $250 minimum initial deposit. This is actually just half the industry average.
In fact, Nadex has made strides to ensure once you have funded your account, you can start trading a variety of markets in binaries and spreads immediately.
This low initial deposit is particularly attractive for beginners who may not want to risk too much capital at the offset.
An even more powerful aspect of risk protection is the capped risk. The most you can lose on a binary options is the amount you paid to enter the trade, since the binary options strategy
’s value cannot go below zero.
Since you can never risk more than you have in your account, binary options your losses cannot exceed deposits.
Spreads & Commissions.
Most brokers do not offer genuine exchange trading. Because Nadex is an exchange and not a brokerage, traders can submit their orders direct to the exchange and not through a broker. Therefore, Nadex members also do not need to pay any broker commissions.
Instead, Nadex charges a fixed fee of $1 per side, per contract. If a binary options trade expires worthless, Nadex will waive the settlement fee. These trading and settlement fees are Nadex’s sole source of income. This means they do not trade against their traders.
Some suggest this may mean attractive earnings potential as your trading costs are lower. In terms of payouts, maximum losses and profits are calculated via entry/exit times, as well as the contract type.
Payouts can exceed 100% while losses are limited to the amount of capital initially invested. Because you cannot take trades if you do not already have the needed amount in your account, losses cannot exceed deposits .
Because Nadex does not participate in trading, the bid/ask spreads in individual markets, as well as the pricing, are determined solely by the participant buyers and sellers.
That said, as a CFTC-regulated exchange, Nadex partners with multiple market makers to ensure viable liquidity and bid/ask spreads.
Nadex Call Spreads.
Nadex also offers a unique product called “Call spreads”. These are offered on a number of markets, including stock index futures, commodities and forex. But fear not – understanding these spreads is straightforward.
You can trade the price of a market like EUR/USD within a range. As the price of EUR/USD fluctuates, so does the spread, although it remains within a predetermined upper and binary options strategy lower limit.
It’s worth highlighting that if the value of EUR/USD exceeds one of the limits, the EUR/USD spread value will come to a standstill at whichever limit it is breaching.
At the upper limit, the spread stops at a maximum value. At the lower limit, the spread reaches a minimum and will not lose any more value, no matter how far the underlying market drops.
As a result, you get enhanced control over your risk-reward ratio. This is because you decide your risk parameters via the call spread limits.
You have intraday and daily call spreads. Each will require a careful spread strategy. This is hopefully where the Nadex trading platform comes into play. Details of which can be found further below.
You hopefully now know what a Nadex spread is. However, for a more detailed breakdown of forex and binary spreads, head over to the official website. You will also find contract specs.
The advantage of Nadex spreads in terms of leverage also needs to be explained. Normally, spot forex traders in the US, for example, can’t get better than 50:1.
Nadex spreads are fully collateralised and dont involve margin. They are not a leveraged trading product, but more like a short-term option.