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.