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Anyone heard or trading with Nadex (North American Derivatives exchange) ?
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Anyone heard or trading with Nadex (North American Derivatives exchange) ?

  #91 (permalink)
Trading Apprentice
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Lots of great opinions on here regarding Nadex. Anyone selling short daily strangles on the ES?

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  #92 (permalink)
Elite Member
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Lots of great opinions on here regarding Nadex. Anyone selling short daily strangles

EliteThink~

I usually go long or short using the indices (Bull Spreads) for the ES and I prefer the straddle for the ES.

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  #93 (permalink)
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I trade Nadex also and think it is a nice add on to my futures trading. Really like trading TF on the bull spreads. Forex pairs are fine on the binary side but wish the expiry times weren't 2 hours. A set 1 hour window would be nice. But its working out fine so far. Just my 2 cents..

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  #94 (permalink)
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nadex is only good if used as a hedge with futures because of the 5-6% edge lose due to the
computer gen spreads that make winning in the long run hard especially with bull spreads. if one
can figure out a strat using binaries then you can get ahead but one must have discipline to not
get frustrated when your right but it expires against you due to the last 5 min being a window where you cant
get out. it is in my opinion a good place to learn to trade and improve one psychology.

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  #95 (permalink)
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shodson View Post
Having traded on Intrade during the election last year the risk/reward of binaries on NADEX was pretty easy for me to grasp.

I've been demo-ing NADEX for a couple of days now, still trying to get the hang of their system and practicing my execution. Still don't understand the how the spreads work, I guess they're like vertical call/put spreads but the pricing is weird, need to go through the videos more.

I have been focusing on binaries though, particularly pre-high volatility moments like cjforex mentioned, I'm interested to see how the CL binaries trade/price in front of inventory reports (I'll be watching this Weds) and how the market spreads out or if the further OTM strikes get more expensive in front of the news. Also, look at low-vol Bollinger squeezes in the underlying and buy cheap straddles.

Everybody has only talked about buying binaries, does anybody sell? For example, if ES is at 1450 and the 1440 is bid/ask 92/95 I can sell that for 92, or be a little greedy and try to sell it for 93.50, risking $6.50 that the ES won't close above 1440, I may not win that often but the times I do the payout is $93.50 on a $6.50 risk. With these kind of trades the usual "risk 2% of your account" probably needs to be dialed down to < 1% to endure large strings of consecutive losses. The other nice thing is that you don't have to wait until settlement, if ES starts to drop near the strike you might be able to buy it back at $70-60 for a nice 5-6x return on risk and capture that profit.

P.S. Bought the VIX 14/20 call spread today, we're hovering near recent lows again, which were 7-year lows, and we're due for a pullback...7 days of straight-up price action needs a pause at some point. If the VIX continues lower I'll buy back my short 20 call for less and buy more 14 or 13 strikes.

Are you still trading on Nadex?

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  #96 (permalink)
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tturner86 View Post
Are you still trading on Nadex?

Sorry, I'm not. I've been focused on other things. It's still something that looks interesting to me, but I don't have any specific trade plan or NADEX-specific strategy with a statistical edge that I can trade right now so it's not in my arsenal.

It seems hard because the spreads and commissions are kind of expensive, plus you have the somewhat strange expiration times to deal with, so the "vig" seems too much to overcome for me at least at this point.

This article in Active Trader on binary options helps illustrate this point.

Plus, I don't see any way to automate NADEX trades so that's kind of a non-starter for me. I don't want to sit in front of a trading screen all day.

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  #97 (permalink)
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shodson View Post
Sorry, I'm not. I've been focused on other things. It's still something that looks interesting to me, but I don't have any specific trade plan or NADEX-specific strategy with a statistical edge that I can trade right now so it's not in my arsenal.

It seems hard because the spreads and commissions are kind of expensive, plus you have the somewhat strange expiration times to deal with, so the "vig" seems too much to overcome for me at least at this point.

This article in Active Trader on binary options helps illustrate this point.

Plus, I don't see any way to automate NADEX trades so that's kind of a non-starter for me. I don't want to sit in front of a trading screen all day.

Thank you for the article. I looked into NADEX because I was intrigued by the simple to understand risk. I was wanting to use it to place small trades that I couldn't take in Futures because it would be beyond my risk allowance for a trade. But I found it very hard to find and execute a good trade on NADEX. Sure the $6 risk to a $94 profit is great R:R but it is also hard to fill that trade at times because there is no one to take the other side. (As I found out a few times of trying.)

Also I didn't like how I had to set for an hour or so looking through the binaries or spreads trying to find something worth while. And I agree with the weird exp times. NADEX seems intriguing and I like that it is US based and regulated, but at the moment was untradable for me.

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  #98 (permalink)
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EliteThink View Post
Lots of great opinions on here regarding Nadex. Anyone selling short daily strangles on the ES?


mrfxtrade View Post
EliteThink~

I usually go long or short using the indices (Bull Spreads) for the ES and I prefer the straddle for the ES.

Not selling straddles. I usually just trade the Box Spreads (Bull Spreads) on the: ES, YM, NQ, SI, GC & CL. Sometimes I will trade the weekly Binaries, not often tho...
If copper starts to move on a daily basis I might trade the Box Spreads on that too...
Currencies..... Well I will trade Box Spreads on those but only if I think they will move 30 pips or more before expiration. Lately, I have not been trading the Box Spreads on the currencies. Only time they move much is during news announcements/reports and the spread gets too far out of whack to trade....
When I get time I'm really going to let NADEX have it when I reply to their "We Value Your Opinion" survey they sent out last week. They need to hear about their ridiculous spreads, and their lack of liquidity in some markets. Like Gold for example.. only 5 box spreads at a time??? Really NADEX.. 5? Hideous! And why only 20 Box Spreads on CL? It's just as liquid as YM and ES basically, but can only trade 20 where as YM and ES you can trade 50 at a time. And their widening of the spreads at report releases makes it hard to trade. I think they should just drop all spreads to 3 points on everything and leave it like that 24/5!

My .02

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  #99 (permalink)
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Using Nadex Binary Options to Trade Crude Oil Futures

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CL is currently testing a bullish PRZ (potential reversal zone) for an Alternate Bullish Bat, the longer price holds above 92.27, the higher the probability of retracement mode attempt. This has a target of 93.34 and scaling point, aka a potential rejection point, at 92.68. I consider 92.68 a directional bias shift level because a hold above there invalidates a bearish cross and increases probability of testing 93.34 or higher.
A hold below 92.27 has initial target of 91.80 for a retest of the bottom of the PRZ. A break down of 91.80 has the extended targets 91.48, 91.23 and 90.73, so these become targets and potential bounce points once price arrives there.
So, watching price behavior at the underlying CL price of 92.27 offers clues as to which targets have a higher probability of being tested.
Given that view, let’s translate it into a viable trading strategy using Nadex listed binary options. We’ll use the daily options that expire today (September 9 10.45EDT) at 2:45PM EDT.
At the risk of stating the obvious, the reader will not be able to replicate this strategy exactly. What I am doing here is demonstrating the efficacy of Nadex listed binary options by way of a real time example.
We consider 92.68 to be a key support level which, if penetrated, will lead to a further decline. With CL currently at 93.25 there is a daily binary with a settlement price of 92.50.
The market in that binary at this writing is 90 bid and 92 offered. This means that the market as a whole believes that there is between a 90 and 92 percent chance that CL will be above that level on expiration.
Given that binary options settle at either 100 or zero we will sell the 92.50 binary at 90. This means that we risk $10 to make $90.
At the same we’ll look at the binary option with the same settlement time and a settlement price of 93.50. The market in this option is currently 30 bid and 32 offered. We’ll buy this option at 32.
This gives us the following scenario: A close above 93.50 makes the position $58 as both binaries settle at 100.
A close below 92.50 makes the position the same $58 as both options expire worthless.
However, if CL is between 92.50 and 93.50 at 2:30 the position loses $42 as the short binary settles at 100 and the long binary settles at zero.
Still, the trade risks $42 to make $58, a better than even money bet, in just a little less than 4 hours time.

MrTopStep

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  #100 (permalink)
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Nadex Bid/Ask meaning....


Good Afternoon,

I just recently started to really focus on day trading Nadex via their Pro platform, and my main reason for using Nadex to place trades on the various Futures markets , is to try and reduce my Risk , as well as to Reduce the cost to trade the Futures outright.

I like the BullCall spreads, for the reason, that when I look to place a trade , I always try and enter " At the Market " and keep as little of Risk on the trade as possible...... I.E. I will place the BullCall " Ceiling " for instance if I want to go short, as close to where the Future is currently trading, at the time I wish to initiate the trade.


Well, today, I entered Short, at the high of the days, on the ES, TF and NQ

But when I went to look at my fills, I was not filled at the price " Time " I thought I was when I initiated the trades

So I just sat here and watched the Bid x Ask, and noticed that there is not always an Ask nor is there always a Bid, and
I am assuming that there was no Bid at the time I went to place my short trades earlier this morning ?


Can someone please give some insight as to what the bid and or ask needs to be at a " minimum " in order to have the highest likely hood of getting filled?

For instance.... If I am only wanting to enter a trade 1 contract and I want to go short,
is having the Bid showing 5 , enough for me to get filled immediately, and as close to the At the Market price I am seeking / hoping for ?

Thanks for the help , much appreciate it - Michael

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