Trading NADEX Is The Right Choice For U.S. Traders
After more than a year researching and blogging about binary options, binary options brokers, platforms and regulation I have learned many things. One of them is that NADEX is the right choice for U.S. traders. There are just too many risks to trading with offshore brokers to make any other choice. Unless you are a gambler and just want the thrill of 60 second options (which are not available through NADEX) there really is no reason for you to trade anything else but NADEX. I’m not saying that European, CySEC regulated, binary options are bad mind you. I am saying that U.S. citizens should turn to NADEX.
NADEX Is The Only U.S. Regulated Binary Options Exchange
NADEX is the only binary options exchange in North America that is solely for trading binary options. NADEX is also the only binary options broker licensed, regulated and allowed to operate in the U.S. The AMEX and the CBOE have exchange listed binary options that are traded in a similar fashion to NADEX but they are not available to retail traders. Plus, NADEX has more assets and exposure to more markets than either the CBOE or the AMEX. At this time no other binary options exchange or broker is allowed to sell investment products to U.S. citizens except Cantor Exchange and they are not fully functional yet.
There are some off-shore brokers still offering binary options to U.S. citizens but don’t be fooled. They are well meaning but probably won’t tell you there is a good chance they will get banned from the U.S. One kind of broker still taking U.S. citizens is the unregulated broker. These are primarily gambling sites or scams and should be avoided at all costs. They are usually fairly easy to detect. Many off shore brokers fall into the next category; CySEC regulated. These are brokers regulated by the government of Cypress and falling under the broader regulations of the EU and the MiFID. These are at least trustworthy in the sense they must comply with oversight, regulation and sanction but they should still be approached with care. Some brokers are better than the rest.
Brokers like AnyOption and 24Options are all CySEC regulated and good choices for European based traders. This I think is a sign of their commitment to legitimate binary options trading. I would look for more brokers to follow that lead and for BDB to search for regulation in other countries as well. Another broker of innovating and leading the binary options industry is Anyoption. This broker has begun to offer 0-100 options that are traded in the same way NADEX options are traded. This could lead, in a best case scenario kind of way, to integration with NADEX at some time in the future.
The problem with CySEC for U.S. traders is that these binary options and brokers are classified as investment instruments and providers of investment instruments. The CFTC and the SEC have a lot to say about how these two things are handled in the U.S. Basically, to sell or market investment instruments especially options, futures and derivatives contracts you must be regulated by the CFTC and the SEC. So far no off-shore broker has gained that certification. One by one the best European style binary options brokers are going to be shut off from access to the U.S. markets due to CySEC regulation, yours could be next. To date I know that Banc De Binary is no longer taking U.S. customers due to regulation and that 24Option is soon to follow. My contact informed that minimum deposits for American traders was going up to $500 and after that there would be no more access.
How To Trade NADEX Binary Options
NADEX binary options are a little different than European style binaries. European style binary options trade for whatever amount you want to risk and pay a set rate. This rate is usually in the range of 70-80% depending on the type of option you buy. Pay out can go up to 500% or more for exotic instruments like one-touch options. This type of binary options only have one strike price, the price that you paid. They also only have two participants, you and the broker. Click here for information about the advantages of NADEX.
NADEX options are all worth $0 or $100 depending on if they are in the money or out of the money. The price of the option fluctuates during its lifespan in tandem with the price of the underlying. Traders pay the spot price for the options and can close prior to expiration if they want to. The price will range between $0.01 and $1.00 and are based on lots of 100 shares. This means that an option with a price of $0.50 will cost $50 to own and will return 100% profit if it closes in the money. Profit or losses from closing the options before expiration are equal to the difference in prices time 100. You can find information on NADEX strategies here.
Even though NADEX is an exchange like the CBOE, NYMEX, and CBOT it is easy to join. Retail traders can sign up for free and gain instant access. It only takes $250 to fund an account and start trading. The platform is easy to use and only requires a little time to master. The real advantage to NADEX that European style options don’t have is true flexibility. The options are trad-able, have so much many more expirys and offer the chance of much larger returns. Imagine, you are able to buy an option for $.035 and it closes in the money. The return is $1.00 for a profit of 185.7%.