Nadex Adjusts Settlement Calculation for 7:00pm and 11:00pm ET AUD/JPY Contracts
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Due to a widening in the bid/ask spread in the underlying AUD/JPY market, which Nadex uses to calculate the expiration value of its AUD/JPY contracts, Nadex has adjusted its settlement process for the 7:00pm and 11:00pm ET expiration Daily AUD/JPY Binary contracts on trade date December 19, 2013. The process was adjusted such that a spread of 10 pips or less (rather than 5) between the bid and ask price in the underlying market was included in the data set of 25 midpoints used to calculate the expiration value of those Binary contracts. Nadex widened the acceptable bid/ask spread for these contracts to more accurately reflect of the level of the underlying market at the relevant expiration.
Additionally, as stated on the Nadex website, if data from Reuters is unavailable, Nadex may obtain market pricing data through Bloomberg or another data provider deemed appropriate under the circumstances. Due to the unavailability of the underlying Reuters data, Expiration Values for the December 19, 2013 AUD/JPY contracts expiring at 7:00am ET were calculated using data obtained from Bloomberg.
These actions were taken in accordance with Rule 7.1, which grants Nadex the authority, in its discretion, to adjust the terms of an outstanding Series to achieve fairness to holders of the affected Contracts and to delay settlement of the Series until the outcome is clear to Nadex as determined by reasonable means when Underlying data is unavailable.
Should you have any questions or require further information, please contact the Compliance Department.