Glossary

Expiration, Expiry, Expiration Time, Expiration Date

The point in time at which the Expiration Value is calculated. For most Nadex contracts, exchange members can leave orders to trade right up until this point. However, please note that some Events markets may close prior to Expiration.

Expiration Value

The calculated level of the underlying market at Expiration, as determined by Nadex (except for Economic Events where it is determined by the relevant source agency). Nadex uses the following process to calculate Expiration Value:

1. Take the last 25 trade or midpoint* prices in the underlying market
2. Remove the highest five prices and the lowest five prices
3. Take the arithmetic average of the remaining 15 prices and round to one decimal point past the point of precision of the underlying market (with the exception of Wall Street 30, which is rounded to the same point as the underlying market)
   

*Midpoints apply to forex, last trades apply to other contracts.

Floor/Ceiling levels

The lower and upper limits against which the expiration value is compared in order to produce the Settlement Value. The Settlement Value cannot be below the Floor or above the Ceiling.

Floor/Ceiling range

The distance between the Floor and Ceiling values. The size of the Floor/Ceiling range may vary from time to time according to conditions in the underlying market.

Last Trading Day

The date on which trading on the given contract stops.

Lead Month/s

The specific futures month of an underlying market that the contract is based on.

Master Spread, Spread Contract

For non-forex Bull Spreads, a Bull Spread contract with a large Floor/Ceiling range.

Narrow Spread

For non-forex Bull Spreads, a Bull Spread contract with a small Floor/Ceiling range. These are generally offered as a series of three contracts with overlapping Floor/Ceiling ranges, covering the full range of the master spread between them.

Number of Ranges

The number of different Floor/Ceiling ranges that are offered for a particular market.

Number of Strikes

The number of different strike prices that are offered for a particular market.

Settlement Value

The level at which a contract is settled, based on the Expiration Value and any relevant parameters of the contract (e.g. Floor/Ceiling levels for Bull Spreads).

Binary Options must have a Settlement Value of either 0 or 100. Bull Spreads must have a Settlement Value no lower than their Floor level and no higher than their Ceiling level. 

Source Agency

In the case of economic events, the publisher of the Expiration Value (e.g. for Nonfarm Payrolls contracts, the source agency is the Bureau of Labor Statistics).

Speculative Position Limit

The maximum aggregate position that any person can hold or control in any particular contract class.

Strike Price

For Binary Options, the level against which the expiration value is compared in order to produce the Settlement Value.

Strike Width

The distance between strike prices for a particular market.

Tick Size, Point Size

The incremental price movement that corresponds to a profit/loss equal to the Tick Value per contract. (For example a tick size of 0.01 means that a movement of 0.01 in the price equates to a profit or loss equal to the value of one tick).

Tick/Point Value

The value of one tick/point. This is $1 for all Nadex contracts.

Trading Hours

The times of day during which the contract will be open for trading on the exchange.

Underlying Market

The source market that expiration values are based on.