Nadex To Amend Market Maker Fees

Nadex submitted to the Commodity Futures Trading Commission (CFTC) its intent to amend its Market Maker fees to include a “Wide Spread Surcharge.” If approved, the amendment will take effect on December 19, 2016. Market makers would be assessed a monthly 50 percent surcharge on the average per lot profit above $2.00.

Nadex hopes to encourage narrower bid-offer spreads on Market Maker quotes. This will encourage quality trading opportunities for all participants. It will also bring about increased liquidity in the market as well as a lower cost of trading for market participants. According to Nadex, this should stimulate the overall trading activity and provide more competition between Market Makers.

Market Makers can still use current trading strategies, if they choose, or they can narrow the bid-ask spreads they are making in order to avoid the additional fees. Narrowing the bid-ask spread should cause increased trading on the exchange.

This encouraging step promotes a better exchange for trading. It will foster competition between Market Makers and tighten the bid-offer spreads for trades. Furthermore, Market Makers have the option of continuing to use the trading strategies they now use, or narrow the bid-ask spreads and avoid the new “Wide Spread Surcharge” fees. It sounds like a win-win situation for all involved.

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Reference: Nadex