Have you read my review on Nadex yet? If you have, you know a little bit about this outstanding exchange. Nadex is one of a select few binary options exchanges you are going to find which is based in the USA and regulated by the CFTC. That alone sets it apart from most competing binary options brokers. There are a lot of other exciting features that put Nadex in a class of its own.
In fact, Nadex goes right in a lot of areas where other brokers go very wrong. I want to do a contrast between some of the awful policies and features gaps I have seen elsewhere and the fantastic service that Nadex offers.
Here are 8 things that Nadex gets right and other brokers get wrong
1. Most binary options brokers are not CFTC-regulated. Nadex is.
The vast majority of binary options brokers are unregulated. More and more brokers are becoming regulated by CySEC, but CySEC has the loosest restrictions. That is exactly why it is so popular to become regulated with them.
In other words, CySEC regulation is nice to have, but the qualifying criteria to belong are not as rigorous compared to other agencies worldwide—including the CFTC in America.
The more scrupulous an agency is in handing out regulatory status, the more protection you will have as a trader.
The fact that very few binary options brokers on the planet have CFTC regulation should tell you just how meticulous the CFTC is. Nadex is one of those. This company has met the strict criteria specified by the CFTC. Just as the CFTC is looking out for traders’ interests, so is Nadex.
The majority of binary options brokers are set up in such a way that they take the opposing side of trades. So if you invest and pick “High,” the broker is on the other end picking “Low.” When you lose money, the broker wins. When you win money, the broker loses.
This is a problem because it sets up a conflict of interest.
You want to win, but the broker wants you to lose. Would you really feel comfortable trading with a company that wants you to fail? What might that company be willing to do to make sure that you do fail?
Some binary options brokers really do go out of their way to make sure that you fail. Unregulated brokers are notorious for a lot of weird platform “errors” that cost traders money. They may for example keep running the clock on you even after a trade ends. Your trade randomly expires a few minutes or seconds late, and you find yourself at a loss when you should have won. You ask the broker about it, and they tell you they are not responsible for technological errors.
Nadex does not do business this way. The site is a real exchange, meaning that they don’t trade against you. Instead, each time you place a trade, you are paired up with another trader who wants to place the opposite trade. So if you trade “High,” someone else is trading “Low,” but not Nadex. Nadex is not involved in any way except to arrange the transaction.
This means that Nadex does not want you to fail, because if you do, Nadex doesn’t get anything out of it. In fact, Nadex only makes money on trades when you win or close out early (more on that in a moment).
So Nadex is not motivated to act against you in any way. That means no weird platform “errors” or other scams designed to cheat you out of your wins!
3. Most binary options brokers do not charge fees.
So how does Nadex make money? Nadex profits by doing the opposite of what other brokers do. Whereas most binary options brokers refuse to charge commissions on trades, Nadex does.
A lot of traders may balk at this, but Nadex charging a fee is actually a good thing.
Again, the fact that other brokers refuse to charge fees on trades means they have to make their money through some other means—like winning while their customers lose.
Because Nadex charges fees on every trade (do not worry, they are quite modest at $1.00 per lot, capped at $50.00), they do not need to do this. They can make a profit without siding against their customers.
There is another major benefit. Even though you need to front the fees for your trades, there is a payoff. This comes quite literally in the form of the payouts on your trades, which are much higher on Nadex than they are on other trading sites.
If you trade with another broker right now, how much do you earn on your winning trades? 75%? 85%?
On Nadex, you could earn up to 100% on most of your trades—and that is on High/Low trades!
It is the fees on your trades which make these kinds of payouts possible. Nadex is a lot more profitable as a company than most of their competitors. This allows them to share some of that bounty around with their customers!
4. The majority of binary options brokers do not offer demo accounts. Nadex does, no strings attached.
Have you ever traded on a demo account? Even if you have been trading binary options for a while now, I would not be surprised if your answer is “no.”
Demo trading is actually a necessary activity on the road to trading success—as in, if you have not done it, you will likely never become a profitable trader.
Despite this, numerous binary options brokers do not offer demo trading at all. If you ask why, they usually cite reasons relating to bandwidth and expenses. Of course, it is far more likely that they deprive traders of this vital tool because they do not want them to learn how to trade. They want them to mess up and lose money so that the broker can profit.
Again, Nadex does not have this motive against its traders—so the company has no problem providing a demo account.
Even binary options brokers who do provide demo accounts typically go wrong. How? They usually restrict the demo accounts. They might only let you use the demo account for a few weeks or even a few days! After that short time period has passed, the demo account will be closed, and you will be forced to start trading live with real money whether you are ready or not.
Nadex does not do this. Instead, they give you lifetime access to your demo account. That means you can use it for as long as you want whenever you need it. If you ever have an issue with your trading that you need to troubleshoot, you can do it with fake money. That way you can conserve your real money until you are ready to return to trading profitably!
5. Many binary options brokers try to trap traders with bonuses which are too good to be true. Nadex offers commission-free trade days instead.
What else do other binary options brokers do in their desperation to make money? One common move is to trap traders by offering them bonuses with strings attached.
You might for example be offered a 100% match bonus on your deposit. “Great,” you think as you deposit $500, “I am getting $500 for free!”
But when is the last time someone on the street walked up to you and handed you $500?
These bonuses sound too good to be true because they are. Check out the terms and conditions for the bonus and you will see a huge turnover requirement, usually around 30x. That means you need to trade the amount of the bonus (and your initial deposit in many cases) 30x before you can withdraw the bonus.
Quite often, it also means that you cannot withdraw your initial deposit or your winnings until you meet the turnover requirement. You can see how this is a clear trap and results in many traders unintentionally parting ways with their money.
Nadex does not do this. They do not have to! Because they charge commissions on trades, they are making plenty of cash, and they do not need to trick you into parting with yours.
Instead, Nadex offers a much better promotion. When you open an account, you will be given a number of commission-free trading days. That means you do not need to pay any fees for your first few days of trading. The more money you deposit, the more commission-free days you get! Best of all, you are given immediate full access to ALL of your winnings. You can withdraw them any time!
6. A lot of binary brokers make it hard to withdraw. Nadex makes it easy.
That brings me to the next area where most other brokers go wrong and Nadex gets it right: withdrawals.
Nadex’s terms for withdrawals are ridiculous … as in ridiculously simple.
“Once your first deposit has been cleared, you can withdraw funds at any time. They will be sent to you by wire or ACH.”
I recommend that you set up ACH so you can avoid the hefty fees typically associated with wire transfers.
As I have indicated, withdrawals are an area where a lot of other brokers totally fail. First of all, there are all the issues associated with bonuses. Beyond that, there are other problems. Other brokers may stipulate for example that you can only make one withdrawal for free each month, after which you will be charged a fee for subsequent withdrawals. Or they may say you can withdraw only so much or so little at a time.
Nadex makes no minimum or maximum withdrawal requirements. You can pull as much or as little out of your account as you need to. You can do it whenever you want, as often as you like.
7. Most brokers use white label platforms with limited functionality. Nadex’s proprietary platform offers you tools for planning trades. You have full control of the trades you execute.
The majority of binary options brokers are white label companies. That means that they are all marketing roughly the same product, but they are rebranding it. There are differences in the services of course, but the trading is more or less the same. Most are using the exact same software—usually a program called SpotOption.
SpotOption isn’t all bad. It is incredibly easy to use, so much so that you can find your way around the platform and understand binary options in a matter of minutes.
But SpotOption does not have a whole lot to offer when it comes to features. The charting platform is pretty limited, to the point where I typically advise traders to download another program to plan trades.
With Nadex, I do not see any need to make that recommendation. Nadex has put together their own proprietary platform, and it is fantastic. You have all the technical and drawing tools that you need to thoroughly plan your trades in advance.
Nadex also gives you more in the way of control over trades which are actually in progress. Other brokers go wrong here as well. They only let you close out of trades early in certain situations. This prevents you from taking profit when you need to or curbing a loss before it gets worse. With Nadex, you can always close out early, so long as another trader is available to take the opposite side of your new trade.
8. Other brokers do not answer your questions—Nadex does.
I have investigated literally hundreds of binary options brokers to date in search of the best ones.
Customer service is extremely hit or miss. I always try to run a test. I either get on live chat and talk to an agent directly, or I send in an email with a question. I usually avoid the phone because I know that 9 times out of 10 I will be met with a hard-sell on opening an account and making an immediate deposit.
I would say that around 80% of the time, my emails go completely unanswered. The rest of the time, I usually have to wait for several days or a week (or even more) to get a response. Only a few brokers reply to my emails within a day, the standard business practice accepted around the world.
As for my live experiences with agents, those are also hit or miss. Agents are helpful about half of the time (when they are even available). The other half they usually try to make me call so I can get the aforementioned hard-sell.
Nadex will never treat you like you do not exist. Your emails will be answered quickly, and you will find their agents are helpful, polite, friendly, and knowledgeable. They will never give you a hard push to trade before you are ready. They will in fact encourage you to take some time to demo test. This is a night-and-day difference between Nadex and other companies. It can make your entire trading experience a much better one.
Conclusion: Nadex Knocks the Socks Off Of Other Binary Options Brokers
I think I have now made a pretty thorough case for working with Nadex instead of dealing with another binary options broker. There are a few other good brokers out there—I have covered them in our recommended brokers list. But Nadex offers more than even most of them do, so they are currently my very top recommendation!