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NADEX vs EU regulated brokers - which is better for binary options trading?

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As I know NADEX is the only regulated broker in USA but it looks much more difficult to trade binary options. Traders also should pay commission fees and capital gains tax which reduce net profit. On the other side Nadex gives a much better edge because trders dont play against the broker as they are playing against the market.

How Nadex works?

Each Contract is worth $100 when it expires is ITM, and 0 if it expires OTM. What is different is that traders can buy contracts that are already ITM for a higher price, or buy contracts that are OTM for a smaller price. When the contract settles (by expiry or take-profit/stop-loss) traders are given the difference.

For example you buy a contract for $20 and expires ITM - your profit will be $80.

A Contract that worth $50 is with strike price that is equal to the market value at the moment of purchasing.

If you buy a contract for $60 and its value increase to $70 you can sell it and make $10 gain. That means you can just buy/sell contracts and settle whenever you want before expiry.

How EU brokers work?

You invest $100 in Call or Put option for a fixed expiry time and fixed payout 70-85%. If you finish in the money at expiry your net profit is $70-85.

It is very simple and easy to trade at EU broker but the problem is you are playing against the broker and the payout is less than 100%.

So which one to choose?


GaryV's picture

Hello, I prefer nadex because at eu brokers you have to wait till expiry to make a profit and payout is less than what your risk. This way the broker has a constant edge against you. Nadex on the other side is the only regulated broker in US and this can give you a piece of mind in terms of your money. You can take a profit if your position is favorable even before expiry. At Nadex you can deploy Strangle strategies, Premium Collection Strategies, Double Binary Strategies, and Butterfly strategies. All these strategies are set to give you a 1:1 risk/payout ratio which is not available at EU brokers.

guru@'s picture

If we compare nadex to 24option you would definitely choose 24option simply because it is a simple and easy to use platform which pays you up to 85% return ITM. At 24option spread is 0 which is very important vs nadex commission fees which hurt your profits. You have to pay capital gains tax at nadex and their platform is very complex and requires much more time of learning and practicing.