Nadex

DEFINITION of 'Nadex'

Nadex stands for the North American Derivatives Exchange, a regulated Chicago-based exchange where retail traders can buy and sell binary options directly on the exchange without a broker. Nadex, which is subject to oversight by the Commodity Futures Trading Commission, offers binary option contracts and spreads in equity indexes, commodities, forex and economic events.

BREAKING DOWN 'Nadex'

Nadex is the first and largest regulated U.S. exchange for binary options, which are simple yes/no trades with limited downside risk. Unlike OTC derivatives, there is no counter-party credit risk. Nadex clears and guarantees all trades done on the exchange. Pricing is transparent and all positions are fully collateralized at all times. Member funds are held in segregated U.S. bank accounts.

RELATED TERMS
  1. Exchange-Traded Binary Options

    Exchange-traded binary options, regulated by the CFTC, let you ...
  2. Currency Binary

    A currency trade that offers an all-or-nothing payoff based on ...
  3. Binary Option

    A type of option in which the payoff is structured to be either ...
  4. Exchange Traded Derivative

    A financial instrument whose value is based on the value of another ...
  5. Economic Derivative

    A relatively new form of derivative contract (the first ones ...
  6. Exchange

    A marketplace in which securities, commodities, derivatives and ...
Related Articles
  1. Options & Futures

    How to Start Trading Binary Options - Sponsored by Nadex

    When trading binary options a secure, easy and professional place to trade is on Nadex, the first and largest CFTC regulated binary options exchange in the United States. Opening an account is ...
  2. Options & Futures

    Introduction to Binary Options - Sponsored by Nadex

    A binary option is a straightforward yes/no trade. At expiration the option will be worth 100 or zero. No other settlement price is possible. That’s why it’s called a binary option. ...
  3. Options & Futures

    Trading Using Binary Options

    Discover the securities and underlying assets you can trade using binary options in the US.
  4. Options & Futures

    Binary Options FAQs - Sponsored by Nadex

    Many investors may not be familiar with binary options, but they’re actually quite easy to use. And they can play an important role in your investing strategy. Here are some of the more common ...
  5. Options & Futures

    A Guide To Trading Binary Options In The U.S.

    What binary options are, how they work and where you can legally trade them in the U.S.?
  6. Options & Futures

    The Benefits Of Exchange Traded Binary Options - Sponsored by Nadex

    Binary options can be a fantastic trading instrument, as long as they are structured correctly and traded on a regulated exchange.
  7. Options & Futures

    Binary Options Strategies - Sponsored by Nadex

    Because of their all-or-nothing character, binary options offer traders a great way to trade on the direction of an asset or the overall market. And what makes binary options intriguing, besides ...
  8. Options & Futures

    Common Misconceptions About Binary Options - Sponsored by Nadex

    There are many misconceptions about binary options, so it is really important that traders understand exactly what they are--and what they are not--in order to use them effectively.
  9. Options & Futures

    Trading Volatility - Sponsored by Nadex

    The perceived volatility of the underlying market also affects the binary pricing. Sticking with our previous example, the EUR/USD 138 binary has about 1 ½ hours until expiration and the ...
  10. Forex Education

    Trading Forex With Binary Options

    Binary options are an alternative way, with a major advantage, for traders to play the forex market.
RELATED FAQS
  1. What is the history of binary options?

    Discover the history of binary options trading, which is now one of the fastest growing investment market vehicles available ... Read Answer >>
  2. What's the difference between binary options and day trading?

    Binary options and day trading are both ways to make (or lose) money in the financial markets, but they are different animals. ... Read Answer >>
  3. What is the difference between derivatives and options?

    Learn how options are one type of derivative and how equity options derive their value from a stock, and understand other ... Read Answer >>
  4. Why are OTC (over-the-counter) transactions controversial?

    Learn more about over-the-counter transactions, and why OTC traders are considered riskier than traders working with larger ... Read Answer >>
  5. What kinds of derivatives are traded on an exchange?

    Learn about the different types of derivatives traded on exchanges, including options and futures contracts, and discover ... Read Answer >>
  6. Is it possible to trade forex options?

    Yes. Options are available for trading in almost every type of investment that trades in a market. Most investors are familiar ... Read Answer >>
Hot Definitions
  1. Return On Invested Capital - ROIC

    A calculation used to assess a company's efficiency at allocating the capital under its control to profitable investments. ...
  2. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  3. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  4. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  5. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  6. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
Trading Center