CME Event Contracts

[R1234]

I've always wanted to try Nadex binary options but never got around to it.

Now that these are offered by the CME, I jumped in and put on my first trades just now on IBKR. I'm starting small (just 1 lot bets) to get a feel for it.

I did a couple of long strangle bets: Natgas and Copper.

Hoping more ET members will try these so we can share some experience

 

[hilmy83]

Interesting. So in your current trades, how do you calculate the pnl after it expires?

 

[R1234]

The exchange posts expiration value after settlement. The bets change in value real time based on supply/demand. You can 'trade' these bets intraday where you can exit early before EOD.

 

[hilmy83]

The exchange posts expiration value after settlement. The bets change in value real time based on supply/demand. You can 'trade' these bets intraday where you can exit early before EOD.

so how they calculate pnl? like in your first trade? you're betting it's not going to hit 3.4 by 10/22. is the pnl just the difference between current price and strike price currently? or does it decay?

 

[R1234]

so how they calculate pnl? like in your first trade? you're betting it's not going to hit 3.4 by 10/22. is the pnl just the difference between current price and strike price currently? or does it decay?

The bets are priced between 0 and 20. These are all intraday bets. If at the end of the trading session you win your bet you get $20. If you lose your bet, you lose what you wagered. No options decay involved - this is straight up betting.

 

[R1234]

Had a good first day with these event contracts. Total bets cost me $37.50 (including commissions) and the net outcome was winnings of $25.04 or an ROI of +66%.

Here are the bets I made (last column shows the PNL):

 

[Overnight]

Had a good first day with these event contracts. Total bets cost me $37.50 (including commissions) and the net outcome was winnings of $25.04 or an ROI of +66%.

Here are the bets I made (last column shows the PNL):

Interesting. Keep us apprised, as you are the first trader here to show trading in this new instrument. Will be interesting to see what happens if you scale up.

 

[emojitrading]

Despite the 'experienced trader' scepticism around these being gambling, retail nonsense, etc., they're an interesting product as they enable expression of some trading ideas that is not possible/too awkward to do using futures. The fact that they can be traded intraday too makes for a very low cost alternative to micros, although it seems daft to use them in this way IMO.

 

[R1234]

Day 2 was a slight loss. Total bets cost me $209.75 (including commissions) and the net outcome was a loss of $31.41 or an ROI of -26%. Here are the transactions:

 

[R1234]

Despite the 'experienced trader' scepticism around these being gambling, retail nonsense, etc., they're an interesting product as they enable expression of some trading ideas that is not possible/too awkward to do using futures. The fact that they can be traded intraday too makes for a very low cost alternative to micros, although it seems daft to use them in this way IMO.

They could be an alternative to micros in the case where one has a directional bias. But if one has a sideways prediction, these bet contracts enable one to express that as well.

Also there is a lottery-like feeling to these compared to micro trading. For example, you could buy a few strikes out bet for $3.50, betting the market will break out in that direction. If it went there at the end of session, you would make $20 or an ROI of about 5X.