Nadex Announces New Settlement Plans For All Foreign Exchange Products

Nadex, the North American Derivatives Exchange has submitted an intent to amend its Expiration Value to the Commodity Futures Trading Commission. Nadex intends to change the process of how it calculates the settlement price for its foreign exchange products.

The Expiration Value for all foreign exchange products will now be calculated by taking the last 10 midpoint prices just prior to expiration of the contract, removing the highest and lowest three prices then averaging the remaining four midpoint prices. That average will then be rounded to one decimal point past the precision of the underlying. The 10 midpoint prices will be between the bid/ask spread and must be five pips wide or less.

Nadex has always used the underlying market as the basis for calculating the settlement price which offers a valid cash settlement price on both spreads and binaries. This change in calculation of the settlement price will help facilitate the introduction of 5-Minute Binary Contracts which will be offered beginning December 15, 2014. This is the same day that this settlement change will be implemented. You can read an article related to the 5-Minute Binary Contracts HERE.

For further information, you can read the notice HERE.

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