There Are Many Advantages To Trading NADEX Binary Options
I have been researching binary options for some time now. One of the biggest areas of concern in the industry that I have uncovered is regulation. Not many binary options brokers are regulated and not of all those who are regulated are the same. The biggest advantage to U.S. traders using NADEX is CFTC regulation. NADEX is the only the binary options exchange licensed by the CFTC and legally operating in the U.S. Without that regulation a binary options broker can not operate in the U.S. or with U.S. citizens.
Some still claim they are accepting U.S. clients but it is only a matter of time before they get shut down, or at least cut off from the U.S. market. If you don’t believe me just check into Banc De Binary or 24Option. BDB has already closed it’s door to U.S. traders and 24Option has informed they are on the way to doing the same. In this will only leave us NADEX so there really is no choice. However, after reviewing and using NADEX I have come to the conclusion that it is the best binary options broker or exchange. There are many more advantages to NADEX than just CFTC regulation.
- OCC. NADEX options are closed through the OCC, the Options Clearing Corporation. This is the same body that clears all other types of options in the U.S.
- NADEX is an Exchange. NADEX is an exchange. They are in business to provide an arena for traders to meet. When you trade NADEX binary options you are trading with other market participants and not the house like with Euro style binary options.
- Multiple Strikes. This gives some real flexibility. Option values at the different strikes are vastily different and offer different risk/reward profiles. If you have been looking at or using the Option Builder tool offered by SpotOption powered off-shore brokers then you will probably love the multiple strikes at NADEX.
- No Spreads. NADEX options are based on an underlying asset and are priced, purchased and closed according to the current spot rate. There are no spreads, cushions or buffers for your trades to overcome.This is one reason to be thankful for CFTC regulation.
- Fees. NADEX charges just $0.90 per contract with a maximum fee of $9 per trade. This is a far cry less than the percentage rates charged by off-shore binary options brokers.
- GTC Orders. To my knowledge there is no off-shore European style broker with limit or gtc order capability. In order to trade with them you have to be present, there is no set-it and forget-it with them. NADEX binary options can be set with a target price and set as good-until-cancelled. This allows traders to pick appropriate entry points and target prices, set orders and then execute them without having to sit in front of the computer all day.
- Use More Strategies. Because NADEX binary options have more than one strike price, are tradable and have credit positions there are dozens of more techniques and strategies available. European style binary options are incredibly limited.Click here for more on NADEX strategies for binary options.
- Hedging. You can hedge more effictively with NADEX binary options. There are some good hedging strategies employable in the off-shore binary options world but in the end the best they can do is reduce risk, not eliminate it. It is possible to open offsetting NADEX positions for a net credit. Because of the pay out structure of off-shore binary options, and because they only offer debit positions, hedging them against each other can reduce your risk but will still leave you with a net loss.
- Tradable. NADEX binary options are tradable. They are only binary at expiration, during thier life they can be opened or closed at any time. The price depends on the price of the underlying, profits and losses are the difference between the cost of ownership and $100.
- No Pattern Day Trader Rule. There is no pattern day trader rule. You can trade as much or as little as you want without fear of margin requirements or sanctions.
- No Margin Requirements. There are no margin requirements with NADEX. All trades are cashed secured. It only takes $250 to open an account. You can buy or sell as soon as your funds clear. Sellers only need to maintain the risk requirement for their open positions. After the initial deposit there are no account minimums, you can make any trade your account will cover.
- Forex Opens Sunday At 3PM. Currency traders can access world markets when they open on Sunday. There is no need to wait for Monday morning opening.
- Selling! You receive a credit for selling a position. This creates positive cash flow!