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Nadex reports Massive Increase in Binary Options Trade

October 9, 2016

US derivatives exchange Nadex reported surprisingly positive results for the three months ending in September 2016. The exchange noted a strong increase in trade volumes as well as the total number of trades involving binary options.

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This marks the 19th time in 20 quarters that Nadex has experienced growth in demand for the financial instruments it offers. According to the company, the figures indicate sustained expansion for both the industry and the derivatives products offered by the Nadex exchange.

The company credits its success thanks to its model of exchange-traded binary options and spreads, which help limit the risk of consumers when trading. As opposed to the industry in Europe, which is dominated by “over-the-counter” brokerage firms, the US has significantly more stringent requirements for binary options providers, ensuring that any trading done with the controversial instrument limits consumers’ exposure to risk as much as possible.

The exchange has also introduced a series of new technological developments which have helped boost interest and traction for Nadex.

Improving Interest

Nadex announced in its third quarter report that interest in binary options was decisively up across the United States. The derivatives exchange announced that for the three months ending on September 30th, both trading volumes and binary options turnover figures increased dramatically. According to the report, volumes were up by 37.00% over the same period the previous year. Total trades of binary options rose by over 53.00% year over year, once again signaling the increasing popularity of the widely debated financial instrument.

The numbers represent a significant improvement over the second quarter of the year, when total trades were up by a smaller 39.00% margin. On the whole, the number of trades has increased in the past three years from 5,000 daily contracts to 10,000 through the second quarter of this year. The report also marks the 19th quarter in the past 20 that has seen overall numbers improving.

Nadex offered several reasons for why trades were on such a marked upward trend. For one, the exchange credits the regulatory model used in the US for increasing the appeal of binary options. In their view, exchange-traded binary options limit consumers’ risks by eliminating the human aspect.

Additionally, Nadex listed growing mainstream awareness of binary options as a strong driver of new customers in 2016. US regulators have worked hard to ensure that the industry in the US is not plagued by the same problems Europe and other regions are having with unregulated brokers. Finally, several technological advancements were listed as having increased the appeal of binary options.

Technology Leading the Way

One of Nadex’s biggest drivers for improvement in the third quarter was the update of two crucial systems. First, the exchange improved its mobile applications, allowing for easier access. This in turn led to faster deposits, withdrawals, and trading.

The second major improvement was a new filter tool added to its trading platform to help users discover opportunities. The new technology, called “Market Filter”, allows traders to search for contracts based on criteria such as asset class, trading price, length of contract, and others.

On the Way Up

On the whole, these two upgrades along with the increasing appeal of the trading model in the US has contributed greatly to Nadex’s rising fortunes. With another strong quarter in the bag, the exchange has managed to established itself as a legitimate venue for binary options traders.

By avoiding the pitfalls of many online brokers and unregulated providers, Nadex has managed to continue improving revenues while offering a less risky option for investors of all levels.