The Chicago-based regulated binary options exchange operator known as the North American Derivatives Exchange (Nadex), has today announced that Group One Futures Trading, LLC (Group One) has joined its exchange membership as market maker.
The move lends confidence from the options industry to the binary options space, as binaries are a related sub-segment of options that also share parallels with OTC forex and offered by a plethora of online brokers albeit not on a regulated venue like Nadex -in most parts of the world.
As the appeal for speculators to trade binary options has been increasing, Group One, which is one of the largest privately held options trading firms in the U.S. It will be making markets in a wide range of contracts listed on Nadex, including binary options on commodity and stock index futures.
Group One was also described in the official press releases as having an affiliate network, thus there could be cross synergies as its affiliates will now see it make markets in a number of regulated binary options products on Nadex, as announced. Group One is part of Group One Trading LLC, and affiliated with Group 1 Trading LP, which have offices in New York, Chicago, Philadelphia, and San Francisco, according to group1.com.
Nadex is expecting that by adding a market maker like Group One, that it will help tighten spreads and increase liquidity, and thus provide deeper markets for some of the most heavily traded products on Nadex. For example, the exchange noted that intraday, daily and weekly US500, Wall St 30, and Gold, could benefit by enabling traders to have a smoother experience executing trades in these products – thanks to the addition of Group One as a market maker.
What to Look for in a Liquidity ProviderGo to article >>
Group One Interim CEO John Kinahan commented in the official press release, “Nadex is a well-respected exchange and we are excited to have the opportunity to make markets there,” and concluded, “Group One provides competitive liquidity across a broad range of markets and Nadex offers us the opportunity to bring our skills to a retail-focused market with novel, interesting products.”
Forex Magnates reporters spoke with Mr. Kinahan around time of publication, he explained that his firm isn’t looking to make markets in Foreign Exchange on Nadex, as its background experience is chiefly on equities, options, index options and commodities, and thus is focusing its talents where they can be most effective.
Tim McDermott, CEO designate at Nadex added in the announcement, “Group One is an expert in its field and will help provide additional liquidity in our most heavily traded markets.”
The addition is part of the exchange’s strategy to attract members and clients, Mr. McDermott concluded, “As part of our overall strategic goals, we’ve been seeking to partner with highly qualified market makers to provide even greater liquidity and tighter spreads; this development should make Nadex an even more attractive trading platform for current and prospective members of the exchange.”
Nadex is part of IG Group, the UK-based publicly traded brokerage operating the IG.com website. The announcement follows recent additions Nadex made in early March when it expanded the number of expiry’s for two key major currency pairs, as reported by Forex Magnates.