Nadex is a Chicago-based broker trading in binary options under the regulation of the CFTC.
A binary option, also referred to as an asset-or-nothing option, is an all-or-nothing proposition in which the investor receives an established amount of compensation if the option expires in the money, or receives no compensation if the option expires out of the money. In other words, the investor is “betting” on whether something specific will or will not happen, usually whether a share will be above an established price at a specific date and time. For example, you might purchase a binary option that says Thompson Steel will have a share price above $15 on May 10 at 11:15 am. If you are correct, you will get a pre-established amount of cash; if you are wrong, you will get nothing.
Some investors are drawn to binary options because they only have to make one simple prediction. However, while binary options are sometimes traded under the SEC, they are more often traded online using non-regulated platforms, making them potentially susceptible to fraud. Recently, the European Union passed regulations attempting to prevent binary option fraud.
Recent Comments