This video shows you how you can short-sell Bitcoin on Nadex, but first, we'll show you a quick reminder about what it means to sell something short:
The basic rule of profit is buy low, sell high. When you short-sell, you’re still going to buy low and sell high, but you switch the order. You sell high first.
You lock in a higher price to sell, then wait for the price to drop, so you can buy it once the price is lower.
In some markets, short-selling can be complicated and involve margin. On Nadex, short-selling is as easy as buying and there’s no margin.
Next we'll show you how Nadex allows you to trade within a price range between a higher price (the ceiling) and a lower price (the floor).
Between the floor and ceiling you can buy and sell the price of an underlying market like the euro, stock futures, gold, or Bitcoin, just like you would on any stock, futures, or forex platform.
As the price of the underlying market moves up, the price of the spread moves up. The market goes down, the spread price goes down. You try to buy low during up trends. And short sell high, closer to the ceiling, when the market goes down.
What’s the difference on Nadex?
The range gives you risk/reward limits and protection. If the market goes above the ceiling, you reach your maximum possible profit and stay there.
If the market drops below the floor, you stop losing money. No matter how far the market drops, your loss is limited to the difference between your entry price and the floor price.
This design gives you a built-in profit target and risk protection.
Finally, we'll show you a real-world example of how you can short Bitcoin the Nadex way.
Let’s say you see a downtrend in a market, in this case Bitcoin. It has done a 50% pullback upwards from the last major move and you think it will resume the downtrend.
For this example, let’s say you placed a simple market order to sell 1 contract. In other words, you are selling the market short, in the hope of profiting if the price goes down from your entry level...
You'll see several ups and downs and different choices you could make along the way.
Nadex offers unique opportunities to trade Bitcoin (or any of 28 other markets) on the way up and on the way down.
And if you already own Bitcoin, now you have a way to hedge your investment.
Nadex lets you trade the price of Bitcoin in the direction and the way that you want.
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 necessarily indicative of future results. Nadex contracts are based on underlying asset classes including forex, stock index futures, commodity futures, cryptocurrencies, and economic events.
Trading can be volatile and investors risk losing their investment on any given transaction. However, the design 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.