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North American Derivatives Exchange rolls out new platform and contracts

22 June 2009  |  1545 views  |  0 Source: North American Derivatives Exchange

The North American Derivatives Exchange (Nadex), the only regulated, retail-focused, online futures exchange in the U.S., has launched a new trading platform and new contracts.

In connection with this launch, Nadex is offering both new and existing members no-fee trading for four weeks, together with a more attractive fee structure. Nadex improves trading opportunities for novice and professional traders alike. The exchange, found at nadex.com, enables members to trade small, easy-to-understand binary option and spread contracts.

The expanded product line now includes equity index contracts (Wall Street 30, US 500, US Tech 100, Germany 30, Korea 200, FTSE 100), energy contracts (crude oil, natural gas, RBOB gasoline), currencies (EUR, GBP, CAD, CHF, YEN), metals (gold, silver, copper), and agriculturals (corn, soybeans), as well as event contracts (initial jobless claims, Fed Funds, European Central Bank rate announcements, nonfarm payrolls, unemployment rate).

"When IG Group acquired the HedgeStreet Exchange over a year ago, we saw the need for a regulated exchange in the United States where the retail trading community could effectively trade forex and other products. This launch represents the culmination of our initial plans to improve the Exchange's technology and product mix," said Tim Howkins, CEO of IG Group, parent company of Nadex. "As a FTSE® 250 company with extensive experience globally in developing and offering retail trading products, IG Group is committed to Nadex and its efforts to provide retail traders in the U.S. with a greater variety of instruments, transparency, and increased access to these markets."

Yossi Beinart, CEO and President of Nadex, explained the unique nature of the Exchange's products. "Unlike the large, unlimited risk products offered by traditional futures exchanges, Nadex contracts are not margined - they are fully-paid upfront and they have limited risk/reward profiles that are attractive to both start-up and seasoned traders."

The Exchange's binary contracts are all-or-nothing contracts that payout a fixed amount to the side of the trade that finishes in-the-money. Spread contracts offer traders a variable payout structure with controlled risk by limiting the value of each contract at the upper and lower ends of each spread's range. A trader's potential loss will not exceed the amount invested, and the potential gain is limited by the contract's cap (for buyers) or floor (for sellers).

"Members can trade these cash-settled contracts without incurring the risk of calls for additional margin if the position moves against them - a member cannot make any trade that would cause losses greater than the initial cost of the trade, which is paid upfront," said Beinart.

Trades on Nadex are easy to execute and easy to track. The spread contracts expire daily and the binary contracts have durations from one week to as little as two hours. Risk on Nadex is limited and capped. Nadex markets are open for trading throughout the day, Monday through Friday, and during extended evening sessions.

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