Binary Options Contracts
When Nadex lists Binary Options on a market there is not just one variable for you to trade – we list a huge selection of expiration times and strike prices on every market on our exchange. This means that, as a Nadex member, you’re never short of a unique trading opportunity.
Binary Options are available on stock index futures based on indices like the US 500, popular spot forex pairs such as EUR/USD, commodity futures on energies, metals and softs, plus economic events like the weekly Jobless Claims number.
For a full list of the markets you can trade Binary Options on, please visit our Range of Markets section.
Expiration and settlement summary
Expiration times can be split into four categories:
- Intraday - at times within the current trading day
- Daily - at the end of the current trading day
- Weekly - at the end of the current trading week
- Event-based - at a specified future time and date
Different expiration times give you the opportunity to trade on price movements over different timeframes, from the very short-term to weeks ahead.
When a contract expires, an Expiration Value is obtained by reference to the Underlying Market according to the following rules:
- Sample the last 25 trade or midpoint* prices in the Underlying Market
- Remove the highest 5 prices and the lowest 5 prices
- The Expiration Value is the arithmetic average of the remaining 15 prices rounded to one decimal point past the precision of the underlying market (with the exception of Wall Street 30, which is rounded to the same precision as the underlying market)
The market prices used by Nadex to calculate such Expiration Values are obtained through a data feed from Reuters. If Reuters is unavailable, Nadex may obtain market pricing data through Bloomberg or such other data provider as it determines appropriate under the circumstances. For contracts on Economic Events, the Expiration Value cannot be calculated as above; see Economic Events for more information.
*Midpoints apply to Spot Forex contracts, for more specific details reference the individual contract in the Nadex Rulebook.
Settlement: Binary Options
Binary Options are cash-settled contracts with an all-or-nothing payout that allow trading on the expected direction of the Underlying Market.
The Settlement Value is obtained by comparison of the Expiration Value and the strike price with reference to the condition specified in the contract.
- Expiration Value condition is achieved: Settlement Value = 100
- Expiration Value condition is not achieved: Settlement Value = 0
The strike price of a Binary Option is the level of the underlying market against which the option is settled. In a 'Gold >$950 at 1:30PM' contract, for example, the strike price is $950.
Nadex lists a range of strike prices for each expiration time of each underlying market. For example, Nadex lists 23 different strike prices for each Daily Gold expiration - staggered at intervals of $3.
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Range of Markets
See the full range of markets you can trade on the Nadex exchange.View markets