Nadex Contracts

This pages gives general information and definitions relating to Nadex Spread contracts and Binary Options. For data relating to a specific market or contract, please see the page devoted to the particular product set.

Nadex Rules

Please note that the descriptions on this page do not replace the definitions given in the Nadex Rules.

Summary

Expiration Value

When a contract expires, an Expiration Value is obtained by reference to the Underlying Market according to the following rules:

  • Sample the last 25 trade or midpoint prices in the Underlying Market
  • Remove the highest 5 prices and the lowest 5 prices
  • The Expiration Value is the arithmetic average the remaining 15 prices

In the specific case of contracts on Economic Events, the Expiration Value cannot be calculated as above; see Specs: Economic Events.

Settlement: Spreads

Spreads are cash-settled contracts with a variable payout that allow trading on the expected direction of the Underlying Market.

The Settlement Value is obtained by reference to the Expiration Value and the Floor/Ceiling Levels of the individual contract:

  • Expiration Value ≤ Floor: Settlement Value = Floor
  • Floor < Expiration Value < Ceiling: Settlement Value = Expiration Value
  • Expiration Value ≥ Ceiling: Settlement Value = Ceiling

Spread contracts are comparable to traditional Call Option Spreads with strike prices equivalent to the Floor and Ceiling values.

    Settlement: Binary Options

    Binary Options are cash-settled contracts with an all-or-nothing payout that allow trading on the expected direction of the Underlying Market.

    The Settlement Value is obtained by comparison of the Expiration Value and the strike price with reference to the condition specified in the contract.

    • Expiration Value condition is achieved: Settlement Value = 100
    • Expiration Value condition is not achieved: Settlement Value = 0

    Glossary: all contracts

    Underlying Market

    The source market for the Expiration Value for a particular contract.

    Source Agency

    The publisher or data source for the Expiration Value.

    Expiration, Expiry, Expiration Time, Expiration Date

    The point at which the contract has been closed for trading, and at which the Expiration Value is calculated.

    Expiration Value

    The calculated level of the Underlying Market at Expiration, as determined by the Source Agency.

    Settlement Value

    The level at which the Nadex contract is settled, based on the Expiration Value and the parameters of the Nadex contract (Floor/Ceiling for Spreads, Strike Price for Binary Options).

    Tick Size, Point Size

    The incremental price movement in the Nadex contract that corresponds to a profit/loss equal to the Tick Value per contract. (For example, a Tick Size of 0.01 means that price movement of 0.24 would give a profit or loss of 0.24/0.01 = 24 times the Tick Value per contract.)

    Tick Value

    The Tick Value for all Nadex contracts is $1.

    Minimum Increment

    The smallest unit in which order levels can be submitted for a given market.

    Trading Hours

    The times of day during which the contract will be open for trading on the exchange.

    Last Trading Day

    The date on which trading in the Nadex contract will stop.

    Lead Month/s

    The specific Futures month of an Underlying Market.

    Speculative Position Limit

    The maximum aggregate position that any person can hold or control in any particular class of contracts. See Position Limits for details.

    Glossary: Spread contracts

    Floor and Ceiling Levels

    The lower and upper limits against which the Expiration Value is compared in order to produce the Settlement Value. The Settlement Value is limited by the contract's Ceiling and Floor levels.

    Floor/Ceiling Range

    The distance between the Floor and Ceiling values. The size of the Floor/Ceiling Range may vary from time to time according to the conditions of the Underlying Market.

    Number of Ranges

    The number of different Floor/Ceiling Ranges that are offered for a particular market.

    Master Spread, the Spread contract

    A Spread contract with a large Floor/Ceiling Range.

    Narrow Spread

    A Spread contract with a small Floor/Ceiling Range. Generally offered as a series of 5 contracts with overlapping Floor/Ceiling Ranges, covering between them the full range of the Master Spread.

    Glossary: Binary Options

    Strike Price

    The level against which the Expiration Value is compared in order to produce the Settlement Value. 

    Strike Width

    The distance between the Strike Prices for a particular market.

    Number of Strikes

    The number of different Strike Prices, at intervals of the Strike Width, that are offered for a particular market.

    Criterion

    The operator (greater than, less than, etc) that defines the relationship between Expiration Value and Strike Price by which the Settlement Value is obtained.