How the First U.S Regulated Binary Brand Emerged and the Problem with NADEX

Last week it was revealed that Forest Park BX, a new offering from the same-named American FX broker, will be the first introducing broker referring traders to the Cantor Exchange via a custom SpotOption white label.

Justin Hertzberg, Esq., the president and CEO of Ambassador Capital Management, LLC (doing business as Forest Park FX, Forest Park BX and Forest Park Binary Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term) met up today with Finance Magnates for an exclusive first interview on the launch of the new binary options offering.

Please tell us about your professional background.

I obtained a BA in Philosophy from Emory University and thereafter I earned my JD/MBA with a concentration in finance from the University of Miami. After graduation, I worked as a securities and commercial litigator for a large Florida law firm. I knew relatively early on that I did not want to make my career in the traditional practice of law, as I was more entrepreneurial than your average attorney.

In 2009, I was presented with the opportunity to work for another large Florida law firm or join an FX Proprietary Trading Firm led by a former, very successful FX fund manager. I chose the latter and never looked back. I’ve since worked for a number of firms on the trade desk and as in-house counsel. In 2013, I registered Forest Park FX as an independent introducing brokerage firm with the NFA and have spent the last 2+ years building a strong, broker-agnostic, client-focused business that offers custom brokerage solutions and reduced trading costs for both retail and institutional traders.

How did you become the first U.S. Binary firm to use the new SpotOption system?

To be honest, just lucky. We started speaking with Cantor Exchange executives back in early 2013, shortly after the launch of Forest Park FX. Cantor was looking to launch the Cantor Exchange, but at the time it only had a mobile app platform. While I was impressed with the initiative and excited to see another binary options player in the U.S .market, I simply felt that it would be too difficult to market an exchange which could only be accessed on a mobile app. I expressed this to Cantor and asked that if/when they had a desktop or web-based GUI to contact us.

Earlier this year, our relationship manager at Cantor reached out to us again and demonstrated the new SpotOption platform for the Cantor Exchange. I was extremely impressed and expressed my desire to work with them. Having been the first introducing broker worldwide with Oanda, I know firsthand that there are risks and growing pains associated with being the first to do something, but there is also great opportunity.

What do you think about the Cantor Exchange offering?

From the time binary options trading made its way into the U.S., I was very intrigued. I watched the development and growth of NADEX and even established Forest Park FX as a referring participant in 2013. Despite the popularity of binary options trading offshore, however, the offering with NADEX just did not seem to capture the interest of U.S. investors (or at least not amongst our clients).

Perhaps it was the fact that NADEX always felt very institutional, very ‘PC in a world that was slowly shifting towards Macs,’ that kept it from catching on quickly as I imagined. With the Cantor Exchange offering/SpotOption platform, I think Cantor has harnessed the excitement and ease of use that non-U.S. binary options brokers have generated.

How does the SpotOption system enhance or complement that?

The SpotOption platform is, in my opinion, the easiest-to-use binary options platform that exists. From one screen, traders can choose and view the product to be traded, the duration of the option, the strike price of the option, the chart of the underlying asset and the put and call prices at that given moment in time.

In addition, as Cantor Exchange is in fact an exchange, all market participants have the same level of transparency, access and opportunity. Unlike OTC binary options brokers, on-exchange binary options remove the inherent unfairness of a ‘house edge’ in trading. Cantor Exchange is building a binary options trading marketplace and the SpotOption platform is enabling those market participants to trade in a fair and balanced way.

What is the added value that ForestParkBX will offer a U.S. trader?

Forest Park BX, www.forestparkbx.com, is the d/b/a or trade name that Forest Park FX is using to promote binary options trading on the Cantor Exchange. As with any new offering, the primary value that we intend to add is education on binary options; what they are, how you trade them, why you might trade them, what the Cantor Exchange is so on. We have a scheduled roll-out of webinars and expos where we will discuss and demonstrate trading binary options via Forest Park BX.

How do you think your firm be able to attract non-U.S. traders based on the CFTC CFTC The 1974 Commodity Exchange Act (CEA) in the United States created the Commodity Futures Trading Commission (CFTC). The Commission protects and regulates market activities against manipulation, fraud, and abuse trade practices and promotes fairness in futures contracts. The CEA also included the Sad-Johnson Agreement, which defined the authority and responsibilities for the monitoring of financial contracts between the Commodity Futures Trading Commission and the Securities and Exchange Commiss The 1974 Commodity Exchange Act (CEA) in the United States created the Commodity Futures Trading Commission (CFTC). The Commission protects and regulates market activities against manipulation, fraud, and abuse trade practices and promotes fairness in futures contracts. The CEA also included the Sad-Johnson Agreement, which defined the authority and responsibilities for the monitoring of financial contracts between the Commodity Futures Trading Commission and the Securities and Exchange Commiss Read this Term regulations and the Cantor name?

With regard to non-U.S. traders, our understanding from Cantor and the CFTC is that anyone who wants to become a market participant on the Cantor Exchange can. However, in an effort to be fully compliant (and perhaps in an abundance of caution), Cantor Exchange is seeking written authorization from the major non-U.S. regulators to expressly permit their residents to trade on the exchange. As we will be following Cantor’s lead on this, our initial focus will be on U.S .traders until such time as we have the green light to pursue non-U.S. traders from authorized jurisdictions. Once the Cantor Exchange doors are fully opened, I expect it will attract both non-U.S. retail and institutional traders as a function of the Cantor name and the ability to execute binary options trades on-exchange as opposed to the OTC market.

What are your goals in terms of trading volumes and trader numbers?

At this juncture, we have not yet set any metrics or goals in terms of volumes or traders. The goal is simply to inform and educate as many people about the virtues of the Cantor Exchange and the benefits and opportunities it offers. With any new market, product, platform, etc. there is always a period of adoption and it is hard to know how long that period will last and how quickly people will adopt it, but we feel confident that Cantor Exchange will become the leading binary options exchange in the near future.

What is your plan to make that happen?

As mentioned above, our initial marketing campaign will consist of industry outreach (as with Finance Magnates) as well as a series of webinars and expo demonstrations. As the first referring participant to the Cantor Exchange, we will also work closely with Cantor; sharing the feedback from our marketing efforts and our clients to discern the most effective ways to reach prospective traders and improve the trading experience.

There is an ongoing regulatory debate in Europe whether binary options should be defined as gambling or trading. How do you view that question and how do you think U.S. traders view it?

I’ve never considered binary options trading to be akin to gambling and I know I am not alone on that side of the debate. Binary options, in one form of another, have been a viable and traded financial product for years in both the institutional and retail space. I can’t speak to how U.S. traders will view binary options, but I know Cantor is not positioning the Cantor Exchange as a venue for gambling and neither will we. Our focus will be on how binaries can be used for speculative trading, as a hedge against spot and option positions in the FX, commodities and indices as well as a vehicle for bona fide market making.

Who is the target audience for retail Binary Options in the U.S.? Is it the same base as FX traders?

Initially, I think the audience for retail binary options in the U.S. will be FX and, to a lesser extent, futures traders. I think there will be an immediate attraction to the on-exchange, fully paid-for nature of binary options where client funds are segregated – especially in light of recent events like the Swiss National Bank announcement in January and resulting fears of broker insolvency and debit balance risk.