Nadex offers Binary options on a variety of Indices, Commodities, and Currencies. Regardless of what time frame you like to trade in, there are choices that range from weekly binary options all the way down to 5 minute binaries in the forex market. If you’re looking to trade forex with defined risk, whether overnight or during normal market hours, then binary options could be a great fit for your trading methodology.
The Dollar has been trading with volatility recently, along with many other world currencies, as traders and investors try to understand the implications of the Trump Presidency. One way to trade the Dollar is to trade the EUR/USD currency pair. If you’re bearish the Dollar you could initiate a long trade in the EUR/USD pair. Or, inversely, if you’re bullish the Dollar then you could sell the EUR/USD currency pair. While the EUR/USD is not a perfect inverse relationship to the Dollar Index, they are highly correlated.
Here is a chart of the EUR/USD on the Nadex Exchange as of about 4:00 p.m. ET Thursday evening. Along the right axis are some of the binary options available that expire at 7 a.m. ET Friday morning, leaving about 15 hours until expiration.
Here is the same chart of the EUR/USD at the same time, except this time along the right hand axis are some of the available binary options that expire Friday at 3 p.m. ET, leaving almost 23 hours until expiration. The only difference in the available binary options listed along the right axis is that the 3 p.m. expirations have 8 additional hours of market exposure, which is reflected in the bid/offer pricing.
This is a great example to see how differing expirations can impact the pricing of binary options. Understanding how binary options are priced in relation to time and price are a crucial element to becoming a profitable trader.
If you’re looking to trader currencies, whether overnight or during normal trading hours in the U.S., then NADEX offers a variety of choices to choose from. If you’re bullish the Dollar the you would naturally be bearish the EUR/USD, and vice versa. Depending on your market expectations, there are opportunities for traders on both sides of the market using binary options. You can also trade both sides of the market for a more complex trade if you wanted no directional bias and only volatility exposure.
The next time you’re scanning the currency markets for the next great trade, consider the Nadex Exchange, and the added benefit of binary options with defined risk. You can open a demo account right now and trade currencies with $25K of demo funds to see for yourself the types of trading opportunities available on the Nadex Exchange.
Nadex Risk Disclaimer
- Trading on Nadex involves financial risk and may not be appropriate for all investors. The information presented here is for information and educational purposes only and should not be considered an offer or solicitation to buy or sell any financial instrument on Nadex or elsewhere. Any trading decisions that you make are solely your responsibility. Past performance is not 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.