Nadex is a US CFTC-regulated Exchange
Binary options are legal and available to trade in the US only on a CFTC-regulated United States exchange. Nadex is designated by the Commodity Futures Trading Commission as a Designated Contract Market and Derivatives Clearing Organization. The CFTC is a US government agency overseeing futures, options and swaps trading. Its mission is to protect market users and the public from fraud, manipulation, abuse, and systemic risk.
Some online binary option providers may not be properly registered and regulated. They are based outside the US, operate outside US law, and may hold member funds in various types of offshore accounts. They cannot legally offer binary options to retail customers in the United States.
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The Difference Between an Exchange and a "Broker"
As a CFTC-registered Exchange and Clearinghouse, Nadex adheres to regulations including:
- Nadex matches buyers and sellers and does not participate in trades
- Nadex holds all member funds in segregated accounts in top-tier US banks (Fifth Third Bank, BMO Harris Bank)
- Nadex's gets its income solely from exchange fees, not from taking positions in the market
Make an Informed, Safe Choice
If you are a US resident trading binary options with an offshore "broker" or "provider," ask your broker some tough but fair questions:
- Are they based in the US and is it legal for them to solicit customers in the US? (Hint: it's not.)
- Do they hold customer funds in segregated accounts in top-tier US banks? Can you withdraw your funds at any time using the web or mobile app and receive a wire or ACH transfer right away?
- Do they ever take the other side of a trade to fill a customer's order? Do they ever profit because a customer on the other side lost?
Nadex is an exchange that matches our members' buy orders opposite other members' sell orders. While one of Nadex's multiple market makers is an affiliate of Nadex, Nadex itself does not engage in any trading on the exchange and does not give any trading advantages to its affiliated market maker. Our primary function is ensuring that all trades are executed fairly and in compliance with US law, and safeguarding our members' funds.
Nadex is at 200 West Jackson, Chicago, Illinois.