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Nadex's Dan Cook (Director of Business Development) - Ask Me Anything (AMA)


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Nadex's Dan Cook (Director of Business Development) - Ask Me Anything (AMA)

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  #11 (permalink)
Reno, Nevada
 
Experience: Advanced
Platform: NinjaTrader
Trading: ZN, ZB, CL
 
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Posts: 328 since May 2011
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Hello and welcome. I looked at your platform some time ago and was curious about the data. How does NADEX acquire its data? Is there a way to compare NADEX real time data with another platform? The reason I ask is because of latency. I noticed that the demo trades that I placed rarely were filled at current price on a limit order. I'm not an expert on your platform and I don't know much about trading binary options - I think you're the only platform authorized in the U.S. - so how would a trader go about verifying the data and trade fills? I might download a demo and take a look again.
Thanks.


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  #12 (permalink)
Dallas, TX
 
Experience: Intermediate
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Chronos24 View Post
I'm sorry if this has been answered some where else. But what is the advantage of Nadex vs lets say Tasty Trade or Think or swim for option trading?

Also, what do you think about programs like https://apexinvesting.com/ that use and market your platform.

Hi Chronos,
Big difference. With binary you either get $100 or $0 ( at expiration). The key is to know what to buy the option for, $6 or $96? The latter will have a much higher chance of paying. You can still close before expiration at Bid/Ask. There are tons of videos on YT.

K

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  #13 (permalink)
Chicago
 
Experience: Advanced
Platform: Nadex
Trading: Binary Options
 
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Posts: 9 since Apr 2019
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clockwork71 View Post
My question is will we ever see tighter spreads? I can drive a truck through them at the moment.

Hi Clockwork71,

Thanks for your question and comment - it is appreciated. The bid/offer spreads are dependent on several factors such as market volatility, contract type, and underlying market. Are there specific markets you are reviewing? If so, please let me know and I will be happy to take a look. Over the years, the spreads have become much tighter as we have added more liquidity providers and exchange volume has grown. When I started here around 9 years ago, it was common to see binary option contract spreads in the 9 to 12 range. In many markets on Nadex binary option contracts are now 2-3 wide. Below is a screen shot of the US 500 which is based on the CME’s E-mini S&P (ES) contract. This screenshot was taken in our live markets this morning. The binary options are trading 2–3 wide. Also, if you haven’t taken a look at our Touch Bracket contracts, which are scaled in size to a micro futures contract, the Touch Bracket listed on the ES is trading at 0.2 wide. That is actually tighter than the minimum tick on the ES which is 0.25.


Dan Cook
Nadex Director of Business Development

DISCLAIMER: Trading on Nadex involves financial risk and may not be appropriate for all investors.
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  #14 (permalink)
Chicago
 
Experience: Advanced
Platform: Nadex
Trading: Binary Options
 
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Posts: 9 since Apr 2019
Thanks: 3 given, 17 received


phantomtrader View Post
Hello and welcome. I looked at your platform some time ago and was curious about the data. How does NADEX acquire its data? Is there a way to compare NADEX real time data with another platform? The reason I ask is because of latency. I noticed that the demo trades that I placed rarely were filled at current price on a limit order. I'm not an expert on your platform and I don't know much about trading binary options - I think you're the only platform authorized in the U.S. - so how would a trader go about verifying the data and trade fills? I might download a demo and take a look again.
Thanks.

Thank you for the welcome, Phantomtrader. With regard to the data, Nadex acquires the underlying market data from third party providers, for example, Reuters. So, something like the Nadex U500 draws from the underlying feed for the ES contract. It is then run through our settlement calculation (more info on that can be found in our FAQ section under “Trading on Nadex”: https://www.nadex.com/learning-center/faq) and the Nadex Indicative Index is produced and published. The easiest way to compare the data would be to look at your futures trading platform and simply compare it against the Nadex chart – with that said, our charts are based on indicative prices only, so there may be discrepancies between Nadex charts and your futures trading platform charts. On the question of fills and latency, if it has been a while since you have taken a look, it has probably improved substantially. Also, perhaps since you have taken a look, we have added what we call an MOP order type, which is like a market order but with built in range protection. This is helpful, as binary option contracts close to expiration can move drastically at times. If you do ever question fills or expiration values though, you can always contact our Customer Service team and we will be happy to provide time and sales data used to comprise the settlement value of a contract. If you are interested in taking a look at the Nadex demo platform, here is the link: https://www.nadex.com/demo. Note: they are now permanent demo accounts, so feel free to use it as long as you like. Also, if you haven’t taken a look at our Touch Bracket contracts, as a futures trader, these are more akin to a micro futures contract and are designed to move in linearity with the underlying market.

Dan Cook
Nadex Director of Business Development

DISCLAIMER: Trading on Nadex involves financial risk and may not be appropriate for all investors.
 
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  #15 (permalink)
Chicago
 
Experience: Advanced
Platform: Nadex
Trading: Binary Options
 
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Posts: 9 since Apr 2019
Thanks: 3 given, 17 received


Chronos24 View Post
I'm sorry if this has been answered some where else. But what is the advantage of Nadex vs lets say Tasty Trade or Think or swim for option trading?

Also, what do you think about programs like https://apexinvesting.com/ that use and market your platform.

Hey Chronos24,

Happy to help with this one. Platforms like Think or Swim, TT, Ninja, etc., are offered through a broker who then connects to an exchange such as CME. Depending on what you trade and how you trade, there are pros and cons to each. Nadex is different, in that we are an exchange, not a brokerage firm. When you trade through Nadex, you are becoming a direct member of the exchange, instead of just a client through a brokerage firm. Nadex is actually the first regulated U.S. exchange designed for the individual trader, rather than institutions. Basically that results in smaller contract sizes on some of the most popular markets (index futures, commodities, and currencies) all with defined risk; i.e. you can never lose more than you put up for a trade and you are never at risk of a margin call. Ever. For example, if someone wants to trade Crude Oil, but can’t afford to risk a $1,000 per point, they may look to Nadex and trade a binary option contract on crude oil which has a total value of $100.00.

With regard to Apex, they have been providing education on Nadex for quite a few years and have developed some useful tools. I can’t recommend Apex directly as they are a 3rd party and not part of Nadex; however, I would suggest if you are interested to check them out and try everything in the Nadex demo environment first. Trading is such a personal endeavor - what works for one may not be right for another, so always try it for yourself in a risk free (demo) environment until you are comfortable in the use of whatever tools you elect to use.

Dan Cook
Nadex Director of Business Development

DISCLAIMER: Trading on Nadex involves financial risk and may not be appropriate for all investors.
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  #16 (permalink)
Chicago
 
Experience: Advanced
Platform: Nadex
Trading: Binary Options
 
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Posts: 9 since Apr 2019
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kaltrax View Post
Hello,

I was trade binary options years ago whith Banc Of Binary (scam).. My experience was bad.

My english it's bad , but i would like paste this comment, about NADEX.

"IG Group which owns Nadex also takes the other side of its clients’ trades via Nadex’s liquidity provider Market Risk Management Inc owned by IG Group Holdings Plc. It makes profit when they lose and loses to them should they win. It is therefore interested in them losing.

Nadex also discontinued offering API (application processing interface) for automated trading two years ago for an undisclosed reason. Only manual trades can now be placed on Nadex - an unheard situation on a modern regulated US exchange. At the same time, their aforementioned liquidity provider Market Risk Management Inc continues to enjoy FIX API access as a Nadex member, which puts other Nadex members in an unequal position.
"

Thanks.

Hello Kaltrax,

I am so sorry to hear about your negative experience with Banc de Binary. I have heard stories over the years of many similar experiences with the binary option bucket shops that were designed just to take peoples’ money. I always recommend checking with the regulators in the jurisdiction of the firm. In the US, Nadex is regulated by the CFTC, which has done a really great job of cracking down on these bucket shops. Here is a link to their fraud advisory (hopefully helpful to others as well) on binary options and it lists Nadex (North American Derivatives Exchange, Inc) as one of only 3 to offer these types of contracts legally in the US: https://www.cftc.gov/ConsumerProtection/FraudAwarenessPrevention/CFTCFraudAdvisories/fraudadv_binaryoptions.html

With regard to liquidity providers, we do have an affiliated market maker, Market Risk Management, owned by our parent company, IG Group, which is operated as a completely separate entity. We also have additional 3rd party liquidity providers/market makers on the Exchange who create a competitive market, so you may be trading against any one of our liquidity providers and/or another member of the Exchange. Nadex as an exchange remains completely unbiased to the outcome of any trade. Nadex itself does not engage in any trading on the exchange and does not give any trading advantages to its affiliated market maker. Nadex's revenue comes from our exchange fees, not trading results, and we do not benefit from the trading activity of our affiliated market maker versus any other market participant.

We did discontinue offering the API connection; however, the reasons in quotes above are absolutely false. As a retail-based exchange, we have an obligation to ensure the integrity of our markets and keep a fair and level playing field. One way in which we do that, is by not letting any of our market makers place orders, only quotes. In other words, they are only there to provide liquidity or “get hit” as market makers, but can never be market takers. Unlike other exchanges where big institutions battle with super computers and lighting fast connections, Nadex remains the exchange for the individual trader.

Dan Cook
Nadex Director of Business Development

DISCLAIMER: Trading on Nadex involves financial risk and may not be appropriate for all investors.
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  #17 (permalink)
Site Administrator
Manta, Ecuador
 
Experience: Advanced
Platform: My own custom solution
Trading: Emini Futures
 
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Posts: 49,057 since Jun 2009
Thanks: 31,658 given, 95,054 received

Hi guys,

It is my pleasure to welcome back Dan Cook @ Nadex for our 360th webinar event, on Tuesday, September 17th @ 4:30 PM Eastern US.

The title for the event is "Trading Nadex Touch Bracket Contracts Sized Like Micro Futures", and bullet points include:

- Interested in trading index futures or underlying currencies markets?
- Nadex Touch Bracket™ contracts may offer several benefits as the newest weapon in your trading arsenal
- Sized with a tick value equal to a micro futures, or mini forex contracts
- Each bracket has a built-in floor and ceiling with no risk of slippage, no matter how crazy the markets get



Register for the event:
https://on.futures.io/gfrqr

Mike

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  #18 (permalink)
Site Administrator
Manta, Ecuador
 
Experience: Advanced
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Posts: 49,057 since Jun 2009
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Webinar recording:



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Mike

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Support our community as an Elite Member:
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  #19 (permalink)
hillsborough nj
 
Experience: Advanced
Platform: Tradestation/Excel
Broker: TradeStation
Trading: emicro
 
Posts: 96 since Sep 2018
Thanks: 17 given, 41 received

Hi Dan,

I have signed on to Nadex on Sunday nights and noticed that Nadex US Equity Indexes are not open even though the US futures market is.

I haven't noticed an explanation on the Nadex site. I have figured that if a user is incapable of finding the information that is a sign that they shouldn't be thinking of trading them.

What is the story with that?

 
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  #20 (permalink)
wayne nj/usa
 
Experience: Intermediate
Platform: tradestation
Trading: emini
 
Posts: 2 since Oct 2016
Thanks: 0 given, 3 received


Hey Dan hope all is well. I've been a trader on Nadex for a good amount of years. I've noticed the new platform is available. Some features that were available on the old platform are not available on the new. Are additions still ongoing or is the new platform finalized. I would love to see the ability to open multiple charts. That really is a necessity when trading multiple markets. Also how much longer will the old platform be available for use.

Thanks Dan much appreciated.

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