Nadex 20 & 5 binaries

[koolaid]

You can say a casino is a house,because it has privilege that other side of betting don't have.
That is , house always has higher odds than customers.
You can say binary options brokers are houses, because they only payout part of your winnings,which means you get unfavorable odds than brokers.
But you can't say an exchange is a house, because in exchange,no one has privilege more than other people.
Everyone in exchange has the same privilege. What a market maker can do, anyone else also can do.
I don't see how you can call it a bucket shop.
By the way, nadex binary correspond to induces futures, not induces themselves.
If anyone take this as a reason to claim binary are not real contracts, I doubt he really has much experience in trading binary.

When I was playing poker before 2004, I also saw some fishes claiming that poker is a scam.Because they were always losing, so they would never believe poker is a fair game, until they themselves make money from poker. Now the exact same thing happen here.
Anyone with common sense should understand, that a game would not be a scam if any player can take either side of the game.

No one said it was a scam. We're saying it's a bucket shop. It's not real because your orders are not backed by anything in the open market. You're just playing against Nadex.

Again, Nadex is a legitimate betting site. They will pay up if you lose. You can also be banker if you want. Allowing you to play both sides does not mean anything. A lot of casinos allow you to play both sides. I can be banker at some of the table games too.

I just want people to know that they're not really trading at all when doing binary options with Nadex. It's not trading...there is no route or implication in the open market.

 

[sle]

No one said it was a scam. We're saying it's a bucket shop. It's not real because your orders are not backed by anything in the open market. You're just playing against Nadex.

Nothing is wrong with that if they allow competition among market makers. When you trade a digital OTC IRL, the dealer is also trading against you, but you can ask 5 dealers for a price.

Just for educational purposes, market makers are replicating binary bets as tight call/put spreads and delta hedge them if they can't find the other side. Now, for a 20 min digital, the spread better be tight for the game to be fair, since the volatility on that time scale is pretty low.

 

[koolaid]

Nothing is wrong with that if they allow competition among market makers. When you trade a digital OTC IRL, the dealer is also trading against you, but you can ask 5 dealers for a price.

Just for educational purposes, market makers are replicating binary bets as tight call/put spreads and delta hedge them if they can't find the other side. Now, for a 20 min digital, the spread better be tight for the game to be fair, since the volatility on that time scale is pretty low.

It's more than just market making...your trades in Nadex have no implication in the open market.

 

[sle]

It's more than just market making...your trades in Nadex have no implication in the open market.

If the market maker hedges delta (which, unless this thing is super-active or crazy wide, they do), there is.

It does, obviously, sound a little gamble-like despite all the appropriate regulatory fixings. My main gripes are the width of the market (need to check that out) and the binary nature of the product (as opposed to something where the risk is continuous). Just an IMHO.

 

[southall]

So why don't you participate in this!!!!! None of you have addressed this giant hole in your arguments. If they're mispricing or posting usurious pricing, and you can too, then you're idiots not to participate in making this free money! So far I've gotten a couple ignores on that, a shrug off, and some frantic attempts at misdirects. Anyone?

The exchange and the principle market maker are owned by the same parent company.

They will say they have separate hardware.

But i bet they will be co located at the same data center.

A small retail trader cannot compete by trying to be a market maker.

They will pick off your mickey mouse market making attempt in fast markets/price spikes and time periods very close to expiration.
You wont be able to update your quotes as fast as they can.

Plus the principle market maker isnt really paying commissions/fees to the exchange as they are owned by the same parent.

So how do you compete with that?

You cant, its not a level playing field at all.

 

[Sig]

No one said it was a scam. We're saying it's a bucket shop. It's not real because your orders are not backed by anything in the open market. You're just playing against Nadex.

Again, Nadex is a legitimate betting site. They will pay up if you lose. You can also be banker if you want. Allowing you to play both sides does not mean anything. A lot of casinos allow you to play both sides. I can be banker at some of the table games too.

I just want people to know that they're not really trading at all when doing binary options with Nadex. It's not trading...there is no route or implication in the open market.

There is no "route or implication in the open market" for SPX using that "logic". Or the CBOE "VIX" binaries. Or the VIX futures for that matter! Or any security really. It's getting a bit tiresome, you arbitrarily deciding what's "real" and what isn't. If you define "real" as a product trading on any CFTC regulated exchange except Nadex then you're right, Nadex isn't real. Thanks for that tremendous insight.

 

[Sig]

The exchange and the principle market maker are owned by the same parent company.

They will say they have separate hardware.

But i bet they will be co located at the same data center.

A small retail trader cannot compete by trying to be a market maker.

They will pick off your mickey mouse market making attempt in fast markets/price spikes and time periods very close to expiration.
You wont be able to update your quotes as fast as they can.

Plus the principle market maker isnt really paying commissions/fees to the exchange as they are owned by the same parent.

So how do you compete with that?

You cant, its not a level playing field at all.

This isn't HFT. If you've gotten to the point where you agree that GAIN has no unfair advantage except in fast moving markets a couple times a year and a fraction of a second before close then we've come a long way from the original blanket denunciation as a bucket shop and I'll be happy to agree, based on our shared experiences in that area, that that's entirely possible. BTW, all the MM's pull their quotes a couple minutes before the contract closes, maybe 30 seconds before for the 5 and 20 min, so if that's an advantage for them they're squandering it.

The fee's are pretty minimal if you trade any size. If that's what's stopping you from competing with their MM then their MM isn't making much, and the whole thing is therefore a moot point. Even you stated in this thread that the amount GAIN makes from MM is far greater than what Nadex makes in fees.

 

[koolaid]

There is no "route or implication in the open market" for SPX using that "logic". Or the CBOE "VIX" binaries. Or the VIX futures for that matter! Or any security really. It's getting a bit tiresome, you arbitrarily deciding what's "real" and what isn't. If you define "real" as a product trading on any CFTC regulated exchange except Nadex then you're right, Nadex isn't real. Thanks for that tremendous insight.

There is...VIX/SPX...they're sold and bought on the open market...many people trade them and hedge their portfolios with them. There is a lot of market implication when someone buys or sells VIX. A large order on SPX will draw attention and interest. You can use VIX to gauge valuations of options pricing. There are many implications. Above all, they're traded in the open market.

Nadex options, however, are only traded in the Nadex bubble. Unless Nadex options are tied to the open market somehow...Nadex will remain just a betting website...AND...that's what it is. Nadex is a betting website.

 

[southall]

Nadex options, however, are only traded in the Nadex bubble. Unless Nadex options are tied to the open market somehow...Nadex will remain just a betting website...AND...that's what it is. Nadex is a betting website.

Binary options in the UK were for a long time regulated by the Gambling Commission, the same regulator that oversees Horse Racing.

The FCA (the main UK finance regulator) did not want to waste its time with them. Only after shady overseas firms started scamming customers, did the UK government force them under FCA regulation last year.

And the FCA is currently considering banning them:

In the FCA's own words: "The FCA questions whether binary bets meet a genuine investment need."

The FCA knows that they are not a genuine financial product.

 

[Sig]

Binary options in the UK were for a long time regulated by the Gambling Commission, the same regulator that oversees Horse Racing.

The FCA (the main UK finance regulator) did not want to waste its time with them. Only after shady overseas firms started scamming customers, did the UK government force them under FCA regulation last year.

And the FCA is currently considering banning them:

In the FCA's own words: "The FCA questions whether binary bets meet a genuine investment need."

The FCA knows that they are not a genuine financial product.

southall, really, red hearing number 12! Let's come to an agreement here. You only get to be wrong 13 times about a single issue and then you'll give it up? I'll go one further and say you only have to show I'm wrong about an issue once and I'll reconsider my position. Fair?