Binary Option Tips: What is the Member Funds Policy?

Binary Option Tips: What is the Member Funds Policy?

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Nadex is a derivative clearing organization (“DCO”) and designated contract market (“DCM”) subject to regulatory oversight by the Commodity Futures Trading Commission. Nadex is not a brokerage firm but a regulated US exchange. Trading on Nadex, there is no middleman where you are a member of the exchange trading either binary or spread options directly.

Member funds on deposit with Nadex are held in a segregated bank account in accordance with Commission Regulation §1.20. These segregated Member funds – held in accounts at Chase bank and BMO Harris bank – are not co-mingled with Nadex operational funds. Any investment of such funds is subject to the limitations and conditions set forth in Commission Regulation §1.25.

All orders submitted to the Exchange are fully collateralized, eliminating the risk of loss due to another market participant’s default. For additional information regarding the protection of Member funds on deposit at Nadex, please refer to the Nadex Rulebook, Chapter 8.

The key takeaway to this is that Nadex traders don’t have any counterparty risk, and don’t have to worry about margin problems that other clients have potentially affecting from uncollectable trade debt.

If you decide to trade Binary Options, this is very important for you to understand. How safe is your money deposited, is there regulation and how do you get your money back.

The information contained above may have been prepared by independent third parties contracted by Nadex. In addition to the disclaimer below, the material on this page is for informational and educational purposes only and should not be considered an offer or solicitation to buy or sell any financial instrument on Nadex or elsewhere. Please note, exchange fees may not be included in all examples provided. View the current Nadex fee schedule. Nadex accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representations or warranties are given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk and any trading decisions that you make are solely your responsibility Trading on Nadex involves financial risk and may not be appropriate for all investors. Past performance is not necessarily indicative of future results. Nadex instruments include forex, stock indexes, commodity futures, and economic events.

Nadex binary options and spreads can be volatile and investors risk losing their investment on any given transaction. However, the limited-risk nature of Nadex contracts ensures investors cannot lose more than the cost to enter the transaction. Nadex is subject to U.S. regulatory oversight by the CFTC.