Nadex Spreads vs Nadex Binaries

#1

Which is a better tool to use when trading on a normal basis, Nadex spreads or Nadex binaries, and why?

#2

Spreads

  1. Binaries too wide on bid asks
  2. Bigger moves with spreads
#3

Depending on the spread or binary that you choose the bid / ask can be about the same. Spreads are NOT always the best choice, yo may to take several factors into account. It all depends on your trading schedule, strategy, system etc. If you are trading very part and only have an hour or two to trade each day, you would most likely want to trade binaries. Binaries only have to be in the money by 1/10 a tick to expire ITM. So you can trade binaries and can be profitable with very little movement. You can trade EPC’s, Momentum Scalps, Elite, Profit Poppers, Spike Striker, Boomerang, etc…there are many systems and strategies to use with binaries, even short term.

With spreads, yes, you can make more with a large move. Spreads are meant to follow the underlying tick for tick, at a $1 a tick move so you do have the potential to make more on a spread with a big move. But, if a market only moves 3 points, you would only make $3, which may not even be enough to cover your bid / ask. But if a market moved 3 ticks on a binary you may expire ITM and the binary be worth $100.00 Ont he flip side if I binary goes down 3 points it may expire OTM and be worth $0. But a spread would only be down $3 So there are many factors to consider. How much time do you have to trade? If you can only trade at night you are better off doing binaries since there is not normally big moves at night. If you have all day to trade, consider spreads. Best thing to do is to go through the Elite MVP Training Course and go through the Spike Striker Training Course to see the differences. Then focus on learning one of those systems, and learning to trade either spreads or binaries, Do not start out with both and overwhelm yourself. Learn one at a time and master it before moving on.

#4

Binaries move faster than spreads and overcome bid ask. Amazes me how many people are so focused on the bid/ask spreads on binaries. You can collect premium you can make massive profits. And they can move Incredibly fast. They overcome the bid ask fast. Bid ask is only an issue if something moves slow. So if your problem on binaries is bid ask - where the problem is not bid ask…

Spreads are great for Iron Condors (if premium is there) Spreads are great for hedging (futures/forex) Spreads are great for straddles (if cheap enough) Spreads are great for directional trades but you need larger moves and more patience

In all cases you need patience on spreads.

If you have 15 minutes or 1 hour or 2 hours to trade and your not doing condors/hedging/straddles on news meaning your trading direcitnally with a derivative. You will most likely like the binaries better for short term trades.

If you have the patience and can play the larger moves then spreads are better for large moves.

But you can trade binaries in and out 3 - 5 times easily in the same hour on the same instrument. You wont be dong that with spreads.

So it comes down to your schedule, your trading time etc…and of course ultimately your system that you are implementing its not as simple as this is better than this… YOU have to fill in some blanks this is better than this if doing XYZ.

[quote=apexallen1]Spreads

  1. Binaries too wide on bid asks
  2. Bigger moves with spreads[/quote]