No doubt, the binary options industry has a healthy dose of positives. For example, controlled risk, easy choices, and relatively better transparency.
However, horror stories of unethical brokers engaging in anti-client practices drown these positives. It may be full blown-out scams, where brokers rip off clients by taking their money but preventing them from making withdrawals.
It may also be subtle frauds, where brokers deliberately manipulate the trading platform or enforce rules with the aim of making consistent profitability near impossible for clients.
NADEX do not engage in any such illicit practices. The foremost reason why is that they are an exchange not your regular offshore broker. The second important reason is that the US Commodity Futures Trading Commission (CFTC) regulates NADEX.
Nonetheless, NADEX is a business. At some point, all businesses get complaints.
Rate and Nature of Complaints
NADEX made their online binary options exchange debut in 2004. In an industry like binary options where competition is rife and competitors often play dirty, NADEX reputation is surprisingly clean for the most part.
Independent review sites all over have nothing but positive remarks about NADEX.
Most of it has to do with the fact that NADEX is the only high-level US regulated binary options exchange in the industry: A feat that places NADEX far ahead of the pack. Thus, NADEX is ultimately the best choice for US clients.
Individual feedbacks are also overwhelmingly positive, especially when you sift the non-genuine and uninformed feedbacks.
The legitimate NADEX complaints often take the form of displeasure that NADEX offers a considerably different service from the usual EU/CYSEC binary brokers.
These complaints include:
After opening your account with NADEX, you have to submit valid IDs before you can engage in trading activity.
There are several options. Additionally, this is a standard routine for US businesses that offer direct financial services, especially post-9/11.
However, for many EU and unregulated brokers, verification is not requisite to make trades.
Quite a number of prospective clients would prefer not to divulge their personal details, especially with the many instances of identity frauds with illegal brokers as accomplices.
It is a valid fear, but NADEX is regulated by CTFC, which provides the utmost protection of the identity of clients. Therefore, this complaint does not hold water.
Unable to Understand the Trading Platform
The NADEX trading platform is very different from the traditional EU-brokers trading platforms. This can present a challenge especially when a client is making a switch.
Nonetheless, after thorough understanding of the trading platform, using it is just about as easy as using the more common trading platforms.
EU binary brokers are famous for opening their doors to people in most regions of the world. The number of countries supported is often above the 150 mark.
NADEX does offer US support, which is unavailable on most EU binary brokers. However, NADEX worldwide support is not as wide as EU-brokers international support.
Therefore, it is in your best interest to confirm that NADEX supports your nationality before going in-depth on its service offerings.
Not Enough Services
Simplicity is a watchword at NADEX. This means that while there are many contracts to trade, the underlying positions you can take are limited and simple. When you trade binaries on NADEX, you can either BUY or SELL.
While many certainly adore this overt simplicity of the trading process, some prefer more diversity as offered on EU brokers.
This is a legitimate demand. However, clients who make this demand often forget that NADEX is an exchange and not a broker.
Thus, NADEX only connects buyers and sellers directly. For the majority of the diversified services that EU brokers offer, the broker automatically takes an opposite position to the client for the trade to go live. On the surface, this is a laudable act.
However, on close inspection, it is not. Brokers are out to make money. Therefore, by betting against the client, the broker has an incentive to try to game the system to win the trade at the client’s expense.
NADEX never takes an opposing position to the client, which is illegal and unethical by the way. Therefore, NADEX would only be able to offer more diversity legally when there is enough interest on each side of the coin for each new service to achieve sustainability.
Not Enough Assets
This is another legitimate complaint. EU brokers on average have over 100 assets. In contrast, NADEX boasts of less than 35 assets. The major reason relates to the reason shared in the “not enough services” entry above.
Therefore, before you choose NADEX, ensure that the assets that interest you are available to trade. You can confirm by going on their website and/or opening a permanent free demo account.
The assets list is continually expanding though.
The payment methods available to deposit and withdraw from NADEX are not expansive, especially for non-US residents.
In contrast, EU brokers offer multiple payment methods for non-US residents including payment processors and e-currencies like Payza, Perfect Money, Webmoney, Skrill, Qiwi et cetera.
US residents can use cards, ACH bank transfer, wire transfer, and paper checks to make deposit. Withdrawals are possible via cards, ACH bank transfer, and wire transfer.
For non-US residents, the only payment channels available for deposits and withdrawals are card and wire transfer.
Lack of Bonuses
EU binary brokers riddle the industry with unbelievable bonuses with harsh conditions attached. Depending on how you look at the glass, it could be a blessing or a curse.
On one hand, it offers new traders the ability to make more profits potentially without risking much. However, the strict conditions attached to these bonuses, whether to check abuse or pull uninformed clients, often defeat the whole purpose of giving handouts.
Monetary bonuses are illegal under CTFC regulations. Therefore, NADEX do not offer those ubiquitous 100% bonus packages flying around. Rather, they only offer trading free days (when you do not pay the contractual fees) for new clients.
You would not hear any NADEX complaints relating to scams, shady withdrawals, or frauds of any type. CFTC is a very strict financial regulatory authority.
CFTC reviews all scam or fraud allegations against regulated entities, with the backing of the government to penalize NADEX if any allegations proves to be true.
Objective Review of the Complaints
Certainly, no broker (or exchange) will be perfect for everyone. This is noting the limited support for nationalities and limited array of assets on NADEX.
However, no one can fault NADEX for providing quite frankly the most protected and transparent binary options brokerage/exchange service currently.
You do not have to be a private detective to work out if your broker is taking positions against you. Or if your broker is trying to game the system to make you lose, because that’s only when they make money.
NADEX only takes fees for connecting buyers directly to sellers. A US authority (CTFC) regulates them to ensure that is exactly what they do. In addition, if they do falter, you can submit complaints to CFTC and be rest-assured they would be looked into.
Multiple layers of protection exist to avoid the possibility of scams and fraud taking place.
- Segregated Accounts
NADEX holds all funds of members in segregated accounts at top-flight US banks—BMO Harris Bank and Fifth Third Bank for utmost protection of your funds however how little.
Although, this is principally for US residents, it is a very potent layer of protection against possible unfair practices by NADEX.
In our research, all three complaints made against NADEX on BBB, as at the time of writing this article, had been resolved amicably. That speaks volumes.
The Commodities and Futures Trading Commission takes its regulatory role very seriously. Very strict rules and regulations are in place to protect client’s funds and preserve ethical trading practices.
It is safe to say that NADEX values its license enough to follow these sanctioned best practices.
If every other thing fails or in addition to other options, there is the good ol’ justice system to protect your interest if you feel you have been treated wrongly. NADEX is a corporate entity operating in Chicago, IL.
Therefore, and this is vital information for US clients, they are not one of the numerous offshore brokers situated in remote regions shielded from direct legal action.