CHICAGO, Dec. 19, 2017 /PRNewswire/ -- Nadex (North American Derivatives Exchange™) launched its new trading instrument, Nadex Bitcoin Spreads, at 8AM ET Monday, December 18, 2017.
Nadex Bitcoin Spreads allow retail traders to take short-term positions on the price of the cryptocurrency, Bitcoin, with risk-reward protections built into the trading instrument. These contracts will be listed for trading on Nadex's regulated exchange and will be cash-settled in US Dollars with all funds held by Nadex's regulated clearinghouse.
These contracts are smaller in size with a value of $0.10 per point, as opposed to the $1 per point or $5 per point contracts recently listed at other futures exchanges. The value of a Bitcoin Spread varies within a floor-to-ceiling range as the price of Bitcoin moves upward and downward, limiting traders' downside risk while still giving them the ability to capitalize on potential profit opportunities. Moreover, while many brokers are restricting their customers' access to listed bitcoin futures, individuals can open an account directly with Nadex and trade directly on its regulated exchange.
Nadex's Bitcoin Spreads also offer active traders many advantages over the physical bitcoin markets. In addition to being able to go long or short, traders may establish a position on Nadex without having to take on the risks of physical delivery, the complexity of getting funds into or out of an unregulated bitcoin exchange or the other challenges of the physical bitcoin markets.
"We saw a strong desire from individual traders to access cryptocurrency markets in a way that makes sense for them," said Nadex CEO, Timothy McDermott. "The Bitcoin market offers great trading opportunities, but these opportunities can come with significant challenges. Our Bitcoin Spreads let traders take short-term positions in this new market without the hassles inherent in the more institutional futures markets or the physical bitcoin markets."
Nadex's Bitcoin Spreads derive their pricing data from the trusted TeraBit IndexSM published by TeraExchange since 2014. Pulling data from underlying bitcoin spot exchanges, all of which have executed Information Sharing Agreements with Tera, the TeraBit Index was created to meet the CFTC requirement that its algorithmically generated price output not be readily susceptible to manipulation. Managed in accordance with the IOSCO Principles for Financial Benchmarks, the TeraBitSM Index provides real-time information about the fair value of Bitcoin with rigorous maintenance and uninterrupted data distribution.
"We're excited to partner with Nadex as their underlying index provider," said Tera CEO Christian Martin. "Their use of the TeraBit Index speaks to the integrity of its design and the flexibility of its application in settling both our institutional bitcoin forward contracts as well as Nadex's retail-focused products like Bitcoin Spreads."
Daily trade in bitcoins has grown to well over $1 billion in notional value. With Bitcoin Spreads, Nadex makes this popular but volatile new asset class accessible to individual retail traders in a form that makes sense, with defined risk and affordable capital requirements.
About Nadex (North American Derivatives Exchange™)
Nadex is the first and largest CFTC-regulated online exchange in the U.S offering binary options and spreads to individual traders seeking a trusted and secure, low-cost, limited risk ways to participate in the markets. Member funds are segregated and held in top-tier US banks. Using Nadex's online and mobile platforms, traders can trade short-term price movements in the most heavily traded currency, commodity, stock index, and cryptocurrency markets, as well as economic events, with limited-risk intraday, daily and weekly contracts. To learn more about Nadex, please visit https://nadex.com. For information on becoming a Nadex member, call 1-866-296-0167 or email [email protected]
About TeraExchange, LLC
TeraExchange, LLC (www.teraexchange.com) is a permanently registered Swap Execution Facility ("SEF") with the Commodity Futures Trading Commission, providing market participants with a cutting edge multi-asset class analytics and execution management system and access to a broad offering of traditional swap asset classes for trading, including interest rate swaps, credit default swaps and FX non-deliverable forward ("NDF") products, as well as FX spot trading through its subsidiary EM4X LLC. TeraExchange is the global leader in the development of a regulated bitcoin derivatives marketplace, receiving CFTC approval of its bitcoin-based instruments and TeraBit IndexSM in September 2014.
Disclaimer: Trading on Nadex involves risk and may not be appropriate for all investors.