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Nadex
https://www.stevehopwoodforex.com/phpBB3/viewtopic.php?t=2442		 Page 4 of 5
Author:  justin7 [ Thu Jul 11, 2013 4:29 pm ]
Post subject:  Re: Nadex
spyderman wrote:If you're trading the news its not a big deal.
You're going to be in front of your computer anyway.

News is scheduled for 8:30 ET.

At 8:00 the new spreads will come out that expire in two hours (8:00-10:00 am)
Ceiling/floor will be near the market (market will vacilate back and forth before news but often will stay in range due to uncertainty. Even if market moves a little, there may well be another earlier strangle (say the 7:00-9:00 am) that's now closer to the market. Or maybe a better one on a correlated pair.

8:00-8:15 you place your strangle. News comes out, market spikes, you close your strangle or ride it out if that's your strategy.

Sounds easy, huh? I'ts not. The mechanics are easy but you have to decide which news events will effect which pairs and get strangles that don't have too much of a spread.
That's your job :D
Well it would sound easier if they placed the upper and lower bull spreads closer together if you were to get in onboth at the same time lol. I was looking atdoing that being as how easy it wasuntil I figured out that they place them atleast 20 or 25 pips apart lol and the ones that last 8 hours are like 55 apart
Author:  spyderman [ Thu Jul 11, 2013 4:41 pm ]
Post subject:  Re: Nadex
justin7 wrote:
spyderman wrote:If you're trading the news its not a big deal.
You're going to be in front of your computer anyway.

News is scheduled for 8:30 ET.

At 8:00 the new spreads will come out that expire in two hours (8:00-10:00 am)
Ceiling/floor will be near the market (market will vacilate back and forth before news but often will stay in range due to uncertainty. Even if market moves a little, there may well be another earlier strangle (say the 7:00-9:00 am) that's now closer to the market. Or maybe a better one on a correlated pair.

8:00-8:15 you place your strangle. News comes out, market spikes, you close your strangle or ride it out if that's your strategy.

Sounds easy, huh? I'ts not. The mechanics are easy but you have to decide which news events will effect which pairs and get strangles that don't have too much of a spread.
That's your job :D
Well it would sound easier if they placed the upper and lower bull spreads closer together if you were to get in onboth at the same time lol. I was looking atdoing that being as how easy it wasuntil I figured out that they place them atleast 20 or 25 pips apart lol and the ones that last 8 hours are like 55 apart
Justin...I think you're missing the point. They don't "place them apart". The floor and ceiling match. The difference between that floor/ceiling and what you pay is how far the market has moved since the option came available plus the spread. They obviously can't move strike prices after the option has hit the market.

The market decides what price you enter on (bid/ask) not Nadex. That's the advantage of Nadex over other bucket shops. You're trading on an actual transparent exchange. You can actually see the bids and offers.
Author:  justin7 [ Thu Jul 11, 2013 10:36 pm ]
Post subject:  Re: Nadex
spyderman wrote:
justin7 wrote:
spyderman wrote:If you're trading the news its not a big deal.
You're going to be in front of your computer anyway.

News is scheduled for 8:30 ET.

At 8:00 the new spreads will come out that expire in two hours (8:00-10:00 am)
Ceiling/floor will be near the market (market will vacilate back and forth before news but often will stay in range due to uncertainty. Even if market moves a little, there may well be another earlier strangle (say the 7:00-9:00 am) that's now closer to the market. Or maybe a better one on a correlated pair.

8:00-8:15 you place your strangle. News comes out, market spikes, you close your strangle or ride it out if that's your strategy.

Sounds easy, huh? I'ts not. The mechanics are easy but you have to decide which news events will effect which pairs and get strangles that don't have too much of a spread.
That's your job :D
Well it would sound easier if they placed the upper and lower bull spreads closer together if you were to get in onboth at the same time lol. I was looking atdoing that being as how easy it wasuntil I figured out that they place them atleast 20 or 25 pips apart lol and the ones that last 8 hours are like 55 apart
Justin...I think you're missing the point. They don't "place them apart". The floor and ceiling match. The difference between that floor/ceiling and what you pay is how far the market has moved since the option came available plus the spread. They obviously can't move strike prices after the option has hit the market.

The market decides what price you enter on (bid/ask) not Nadex. That's the advantage of Nadex over other bucket shops. You're trading on an actual transparent exchange. You can actually see the bids and offers.
but what I mean is lets say I buy the top bull spread and sell the bottom bull spread at the sametime... I'll alwaysbe at a disadvantage..because theprice at which you sell the bottom bull spread and buy the higher one there is a differencein price between them right? thats what I'm saying is they if you look at the price for which you would sell the bottom one and the price for which you would buy the upperbull spread. nadex seemsto consistently keep that figure apart by the equivalent of $20-$30 or 20-30 pips..
Author:  justin7 [ Thu Jul 11, 2013 10:36 pm ]
Post subject:  Re: Nadex
or am I mistaken and it's only thatclose on demo? and on live they keep both closer to actual market value?..
Author:  spyderman [ Thu Jul 11, 2013 11:29 pm ]
Post subject:  Re: Nadex
justin7 wrote:
spyderman wrote:
justin7 wrote:
spyderman wrote:If you're trading the news its not a big deal.
You're going to be in front of your computer anyway.

News is scheduled for 8:30 ET.

At 8:00 the new spreads will come out that expire in two hours (8:00-10:00 am)
Ceiling/floor will be near the market (market will vacilate back and forth before news but often will stay in range due to uncertainty. Even if market moves a little, there may well be another earlier strangle (say the 7:00-9:00 am) that's now closer to the market. Or maybe a better one on a correlated pair.

8:00-8:15 you place your strangle. News comes out, market spikes, you close your strangle or ride it out if that's your strategy.

Sounds easy, huh? I'ts not. The mechanics are easy but you have to decide which news events will effect which pairs and get strangles that don't have too much of a spread.
That's your job :D
Well it would sound easier if they placed the upper and lower bull spreads closer together if you were to get in onboth at the same time lol. I was looking atdoing that being as how easy it wasuntil I figured out that they place them atleast 20 or 25 pips apart lol and the ones that last 8 hours are like 55 apart
Justin...I think you're missing the point. They don't "place them apart". The floor and ceiling match. The difference between that floor/ceiling and what you pay is how far the market has moved since the option came available plus the spread. They obviously can't move strike prices after the option has hit the market.

The market decides what price you enter on (bid/ask) not Nadex. That's the advantage of Nadex over other bucket shops. You're trading on an actual transparent exchange. You can actually see the bids and offers.
but what I mean is lets say I buy the top bull spread and sell the bottom bull spread at the sametime... I'll alwaysbe at a disadvantage..because theprice at which you sell the bottom bull spread and buy the higher one there is a differencein price between them right? thats what I'm saying is they if you look at the price for which you would sell the bottom one and the price for which you would buy the upperbull spread. nadex seemsto consistently keep that figure apart by the equivalent of $20-$30 or 20-30 pips..
Again, Nadex does not determine at what price you buy or sell the option/spread, they only determine the instruments available. They are an exchange. The price is set by the bids and offers that trader's, such as yourself, are willing to pay or take.

Notice the attached order screen for the Eur/Usd 1.3050-1.3150 9:00 pm spread. The market has a bid and ask of 1.3092 and 1.3097 with the underlying asset trading at 1.3096. Again, not Nadex determining that...the market is.

I have placed a pending buy order in at 1.3075, well below the market. You can see it showing up in the order stack. If someone put in a sell at market right now for 51 contracts the first 50 would fill at 1.3092 and then mine would fill at 1.3075. That would be a bad trade for the seller... :lol:
Author:  spyderman [ Thu Jul 11, 2013 11:40 pm ]
Post subject:  Re: Nadex
Here's another example from right now.

The Gbp/Usd strangle. The floor/ceiling is at 1.5180 which happens to be right where the underlying market is at. Can't get a much better strangle/strike matchup then that.

Now if you want to trade that one you'll have to buy the upper for 1.5187 and sell the lower for 1.5173. So you'll be paying a total spread of 14 pips or $14.00 per contract.

Now these are 150 point spreads so your max profit is $150 on each side. Now obviously you'd have to have a pretty wild scenario to score on both sides and you're also gonna have to have some real movement to max out even one side by 9:00pm. But if your particular strategy indicated that Gbp/Usd was getting set to move 50 pips one way or the other by 9:00, you'd stand to make $50 off that $14 risk. 1:3.5 RR ain't bad...especially with no stoploss and a capped risk. 8-)

Try that trading the underlying...
Author:  justin7 [ Fri Jul 12, 2013 12:43 am ]
Post subject:  Re: Nadex
hmm I see on your screenshot there you have 2 ticket order windows open is that only on live you can do that? I tried to open 2 up at the same time on nadex demo but to no avail..
Author:  justin7 [ Fri Jul 12, 2013 12:45 am ]
Post subject:  Re: Nadex
and that screenshot is actually better than what I geton demo...on demo the different between both is more like always over $20 or 20 pips difference..there it's only 15 or so.. so it is indeed closer on live?
Author:  spyderman [ Fri Jul 12, 2013 2:30 am ]
Post subject:  Re: Nadex
justin7 wrote:and that screenshot is actually better than what I geton demo...on demo the different between both is more like always over $20 or 20 pips difference..there it's only 15 or so.. so it is indeed closer on live?

No that's my demo account. Demo accounts are the light blue. When you're logged onto your live account the borders, etc. are dark blue.

I think the reason you're seeing so many large distances is that you're not finding the spreads where the floor/ceiling is close to where the underlying is trading.

Taking another example of Gbp/Usd, we have a floor/ceiling of 1.5170. But the underlying price has moved away from the strike to 1.5181. So even if you got these free, on the sell side, you're still 11 pips in the hole, as you won't be in-the-money on that side until price drops back to 1.5170. However, you're already 11 pips in-the-money on the buy side...that's why you have to pay more.

So on the buy side you have your $7.00 of time value like before plus the $11 of intrinsic value, while on the sell side you only have the $7.00 of time value. So you have a total risk of $25 instead of the $14 before. That's still a pretty good trade on a 50 pip move.
Author:  spyderman [ Fri Jul 12, 2013 2:32 am ]
Post subject:  Re: Nadex
justin7 wrote:hmm I see on your screenshot there you have 2 ticket order windows open is that only on live you can do that? I tried to open 2 up at the same time on nadex demo but to no avail..

You can do it on demo.

Go to "My Account"
Click the "Settings" tab.
Then "Preferences"
Click the box "Allow multiple Ticket Panels" under "Multiple Order Tickets"
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