Nadex Widens Acceptable Bid/Ask Spread Used in Currency Expiration Value Calculation

Notice Type Notice ID
Exchange 999.032119

Pursuant to the authority granted in Nadex Rule 12.1(l), on trade date Thursday, March 21, 2019, the underlying GBP/USD, USD/CAD, and GBP/JPY cash markets experienced a period of decreased activity at the open of the Nadex derivative contracts.  The expiration value calculation process under normal market conditions would collect midpoints for the expiration calculation data set 10 pips wide or less between the bid and ask spread.  Due to decreased activity in the relevant underlying markets Nadex took the following actions:

  1. For the 5-Minute Binary GBP/USD contracts that expired at 3:15pm ET, the acceptable bid/ask spread used for expiration value calculation was widened from 10 pips to 16 pips. Pursuant to Nadex Rule 12.31(f)(iv)(5), Nadex refrained from listing its 5-Minute Binary GBP/USD contracts which would normally expire at 3:20pm ET through 3:50pm ET.

  2. For the 5-Minute Binary USD/CAD contracts that expired at 3:15pm and 3:20pm ET, the acceptable bid/ask spread used for expiration value calculation was widened from 10 pips to 41 pips. Pursuant to Nadex Rule 12.33(f)(iv)(5), Nadex refrained from listing its 5-Minute Binary USD/CAD contracts which would normally expire at 3:25pm ET through 3:50pm ET.

  3. For the 5-Minute Binary GBP/JPY contracts that expired at 3:15pm ET, the acceptable bid/ask spread used for expiration value calculation was widened from 10 pips to 20 pips. Pursuant to Nadex Rule 12.41(f)(iv)(5), Nadex refrained from listing its 5-Minute Binary GBP/JPY contracts which would normally expire at 3:20pm ET. Nadex listed its 5-Minute Binary GBP/JPY contracts which expired at 3:25pm ET, and the contracts were settled with the widened bid/ask spread of 20 pips. Nadex refrained from listing its 5-Minute Binary GBP/JPY contracts which would normally expire at 3:30pm ET through 3:50pm ET.

All contracts resumed listing for the 3:55pm ET expiration, and returned to the regular acceptable bid/ask spread width of 10 pips for expiration calculation at that time. 

Should you have any questions or require further information, please contact the Compliance Department.