With GBP and AUD experiencing trending price action over the last year relative to the USD, the North American Derivatives Exchange (Nadex), which offers US regulated binary options trading, has extended the number of expirations for these two currency pairs respectively, in order to meet greater demand from clients around-the-clock.
Previously, these pairs only had two specific expiration times including 10am and 3pm, for the short-term two-hour contract specifications, and as per the official press release an additional 16 two-hourly expirations were added, including 4pm, 5pm, 8pm, 9pm, 10pm, 11pm, 12am, 1am, 2am, 3am, 4am, 5am, 6am, 7am, 8am and 9am (all times are in EST).
Nadex Chief Comments on Recent Volumes and Retail FX Market in the US.
Forex Magnates’ reporters spoke with Nadex’s CEO-Designate, Timothy McDermott, who also holds the roles of General Counsel and Chief Regulatory Officer for the firm. He provided feedback following the announcement, including answers in response to questions we asked, and said, “We see a growing acceptance among traders for exchange-based markets in the United States. As OTC retail FX markets have been flat or even shrinking in terms of the volume of trading in the US, both trading volumes and number of active traders on Nadex have been growing. With respect to retail traders who have been active in the stock market, we see our markets – and particularly our Wall Street 30, US 500 and other contracts based on equity index futures – as a natural fit.”
Mr. McDermott added, as part of the feedback to Forex Magnates regarding the announcement,”Nadex volumes are growing generally, and we expect the addition of the overnight expirations to add to that growth in these pairs.”
Expiries Expanded to Cover Additional Time Frames
As a result of clients looking to capture short-term price movements, since these pairs have trended generally in one direction over the last year with AUD weakening versus the USD, and the GBP strengthening relative to the US currency, the short-term binary options contracts, which expire after two hours, were expanded to give a wider range of time series to choose from for intraday trading.
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“By adding additional intraday expirations during overnight hours, we are continuing to respond to requests for additional FX trading opportunities by our members,” added Timothy McDermott, CEO-Designate at Nadex, commenting in the official press release.
Mr. McDermott concluded regarding the increase trading activity and changes to meet around-the-clock demand, “We have seen a tremendous uptick in traders leveraging our daily and intraday contracts in order to boost trading opportunities and effectively capitalize on short-term movements in the market. The currencies in these intraday contracts are some of the most actively traded in the FX market and we wanted to provide traders with even more trading opportunities from market open on Sundays.”
Binary Options in the US and the Rest of the World
Forex Magnates recently covered when Nadex’s former CEO, Yossi Beinart was appointed to head the Tel Aviv Stock Exchange in Israel, following an electoral vote in his favor among exchange constituents.
In the US, Nadex is regulated as a Designated Contract Market (DCM) and Designated Clearing Organization (DCO) with the Commodity Futures Trading Commission (CFTC), and thus able to serve US clients with a product that is normally offered by OTC brokers outside of the US.
Nadex is part of the UK headquartered IG Group, and is one of the few regulated exchanges in the US to offer on-exchange binary options, covering some 2,400 different binary options contracts across multiple time frames and markets, thus providing traders a new way to speculate as well as hedge against movements in underlying and correlated asset classes.
Binary options have risen to popularity among both Forex traders (of which binary options traders are a subset), as well as both subsets of other segments such as stock options and stock market traders, as well as traders who focus mainly on binary options trading as part of their strategy to cover price movements across different markets.