Binary options brokers USA: Which broker is perfect for U.S. binary options traders?
While the legal situation for U.S. binary options traders is a bit complicated, we can give you a clear recommendation on which broker or exchange is perfect to handle this situation. This binary options exchange is Nadex. Nadex is one of the few binary options exchanges in the USA. Nadex is based in the U.S., Nadex is registered with U.S. authorities, and Nadex offers a service that is tailor-made for U.S. binary options traders.
In detail, Nadex offers these advantages to U.S. traders:
Advantage #1: It’s 100 percent legal
The main advantage of Nadex is obvious: it is 100 percent legal for U.S. traders, no questions asked and no gray areas. As we mentioned early, trading with a broker that is not regulated by U.S. authorities is not illegal in the sense that someone will sue you, but you are unable to rely on legal assistance if something goes wrong.
Think of it as a deal between friends. When you lend your friend money, there is no guarantee that you will get it back. Without a contract, you are unable to sue your friend if they never repay you. When you give your money to a registered bank, however, there is a legal system in place that takes care of your money and guarantees that you will get it back.
Currently, Nadex is one of the few binary options exchanges that offer this protection to U.S. traders.
Advantage #2: A higher level of security than anywhere else
There is a good reason why many brokers avoid U.S. regulation. This reason is that the U.S. regulation for financial institutes is strict. In the wake of the 2008 financial crisis, the authorities have done a lot to prevent a similar incident from ever occurring again, which means that they have tightened the rules that govern the banking sector significantly.
For a binary options broker, all the additional requirements and the reports they have to file to proof that they have met these requirements mean additional costs. Additionally, while these requirements increase trader security, they limit the options of a broker that now has to abide by certain standards it could ignore otherwise.
Advantage #3: A unique new trading system
Aside from the legal issues, Nadex has also done a lot to revolutionize trading itself. The first and most obvious aspect of this revolution is that Nadex has introduced a new way of trading high / low options that allows you to trade more accurately and maximize your payout.
Traditionally, high / low options used the current market price as a basis for their prediction. You could predict whether the market will rise or fall over a given period of time in relation to the current market price.
While this system is simple and easy to understand, it leaves a lot to be desired. By attaching your prediction to the current market price, brokers limit the predictions you can make and the accuracy of these predictions.
If you know that a resistance will prevent an asset from falling below $100, for example, this prediction is impossible to trade if the current market price is at $101. You always have the gray area from $100 to $101, where your prediction would be correct, but you would lose your binary option anyway. If you invest in a high option nonetheless, the asset might very well fall to $100.50, and you would lose your option despite having made the right prediction. Such a system makes no sense.
Nadex has done the right thing and offers traders a more flexible way of trading high / low options. Instead of having to use the current market price as the target price for your prediction, you can choose from 30 different target prices periodically. Some of these target prices are above the current market price, some are below it, and you can predict whether the market will trade above or below each price.
This system allows you to make unique new predictions:
- You can predict that the market will close above a target price that is above the current market price. This prediction is riskier than trading a regular high option, which is why you get a higher payout. If you expect a strong upwards movement, this prediction can help you to maximize your return.
- You can predict that the market will close below a target price that is below the current market price. This prediction is riskier than trading a regular low option, which is why you get a higher payout. If you expect a strong downwards movement, this prediction can help you to maximize your return.
- You can predict that the market will close above a target price that is below the current market price. This prediction is less risky than trading a regular high option, which is why you get a lower payout. If you expect a sideways movement or are unsure what the market will do next, this prediction can help you to win a binary option in a market environment where it would be difficult to win a regular high option.
- You can predict that the market will close below a target price that is above the current market price. This prediction is less risky than trading a regular low option, which is why you get a lower payout. If you expect a sideways movement or are unsure what the market will do next, this prediction can help you to win a binary option in a market environment where it would be difficult to win a regular low option.
All of these four ways help you to trade more accurately and maximize your profits. With the risky target prices, you can make more money when the market environment allows for such predictions. With the less risky target prices, you can find trading opportunities in market environments where you would be unable to find a profitable opportunity otherwise.
If this way of trading sounds intriguing to you, you will be glad to hear about the next advantage of Nadex, which allows you to test this system without risking a single Cent.
Advantage #4: A deposit-free demo
Binary options demos are a great tool for new traders. Demos enable you to trade with a fully functioning binary options account, but invest play money instead of real money. In the case of the Nadex demo, you get $25,000 in play money to trade in any way you want.
In the environment of a binary options demo, there is no risk. You can test yourself, the broker or exchange, and new strategies and trading styles without having to worry about losing money. Especially new traders can profit from this system, as it allows them to test their trading skills without having to risk money on a form of investment they have never tried before. In fact, new traders can use a demo to develop their skills until they are absolutely certain that they can turn a profit by the end of the month, allowing them to switch to real-money trading only when they know that they can make money.
While demos are a great tool, traditionally, there has been a problem with them: most binary options brokers USA demand that you deposit money with them in order to try their demo, usually at least $250. This is hardly an obstacle for experienced traders with a large account balance, but for newcomers, having to invest $250 in something they have never tried before negates all of the advantages a binary options demo is supposed to have.
Luckily, Nadex came up with a better solution. While Nadex has one of the best binary options demos the market has to offer, they allow you to get this demo entirely without having to deposit any money. Simply fill out the sign-up form, and you can start using your demo.
For new U.S. traders, this is the ideal setup. It allows you to test Nadex, yourself, and binary options in general without having to invest a single Cent. If you find that you have a talent for trading binary options, you might have found your way to financial independence and out of the rat race. If you find that binary options are not for you, you have learned a valuable lesson without losing money. Either way, you win.