What are NADEX Spreads? And How Do You Use Them to Profit More than Binary Options?
NADEX spreads seem like they've been largely ignored. What they are is simply a way to trade momentum and make a lot of money doing so. The risk is preset and so is the max reward. NADEX will tell you your risk and reward right up front on your order ticket window. And the great things about spreads is that if you make some advancement, even if it is just a little, you get to keep that profit at expiration and you won't get your position blanked out because it didn't make it to "in the money".
You can trade futures and Forex, commodities with these NADEX spread which means that you can trade these types of instruments in a much easier way. How is it easier?
Well first of all your risk and reward is pre-set. You know your risk ahead of time and your max risk is pre-set, pre-known, whereas, if you forget to exit a futures or Forex position upon hitting your stoploss point you could lose a lot of money.
Second of all in order to fund your account, you simply need a credit card number, allowing you to start even with only $100. You aren't forced to wire in money or send in a check that takes a few days or more to clear as with futures brokers.
You don't have margin requirements, which is great, and those margin requirements can be annoying when trading the underlying asset such as futures or Forex. You don't have commissions which can add up with emini futures brokers big-time when day trading.
Plus as compared to binary options there is no "in the money" "out of the money" aspect . So where you are in the spread is what you get at expiration. This means that if you made some gains you get to keep them. You don't have to clear any "in the money" hurdle as you do in binary options. Whereas in binary options, you lose the whole position, even if you made some gains on price action in your favor, if you didn't make it "in the money".
So let's say you traded a daily spread and you made seven points with the US small Cap 2000: you get to keep all seven points of profit which are, which on hundred contracts, would be $7000. But let's say you did out of money binary option and seven points did not cut it for the daily binary option to the in the money point well by expiration you lose whatever you put in whereas with the spreads you make $7000. Now that's cool isn't it.