What Are Touch Bracket™ Contracts?

The revolutionary new way to trade.

 

Man trading touch brackets on the go

Nothing beats the rush of watching markets move.

Changing directions, shifting conditions, volatility, momentum, trends...we know it’s why traders love what they do. It’s why Nadex offers Touch Bracket contracts, a breakthrough new approach to actively trading all of the markets you love.

A Nadex Touch Bracket enables you to make trades based on price action within a predefined price range. Each contract has a floor and a ceiling offering a natural price target with known risk and reward.

You decide where you think the market is headed. The Touch Bracket offers the plan for the trade. And the excitement? That’s provided by the markets.

A Touch Bracket tracks the movement of the underlying market price. If the Underlying Indicative Index touches either the floor or the ceiling of the Touch Bracket, then the contract expires immediately. That way you know maximum profit targets and the maximum risk if your trade goes against you. And, you can always place an order to close a position prior to expiration.

 

 

How Do Touch Bracket Contracts Work?

 

Touch Bracket contracts are a cutting edge and innovative, new way to trade.

The best part though, is that timeless principles like ‘buy low and sell high’ and ‘risk/reward’ still apply.

A Nadex Touch Bracket is a contract which trades within a set price range capped by the floor and the ceiling. Touch Bracket contracts linearly track the movement of the underlying market.

If you are buying, your potential reward is defined as the difference between the market level and ceiling. Like we said, your objective is still to buy low and sell high.

If you are selling, your potential reward is simply the difference between the underlying market level and floor.

Your Touch Bracket can expire in one of two ways – by price or time.

 

 

Let’s walk through how that works

 

At the start of each week we create and offer four brackets per market. Each bracket has a unique floor and ceiling built-in.

A touch happens when the Nadex Underlying Indicative Index is equal to or higher than the ceiling, or equal to or lower than the floor.

As the market moves, the indicative price may hit the floor or ceiling of the Touch Bracket. When it does, that bracket expires and you automatically take your profit or loss. Then we create a new one with a new bracket range.

If the market never touches the floor or ceiling of the bracket, each Touch Bracket automatically expires at the end of each week. Profit and loss are determined by the difference between where a position was bought or sold and the final value of the contract.

Here are the details:

  • Each Touch Bracket has a maximum duration of 1 week
  • At the beginning of the week, Nadex will list four Touch Bracket contracts per applicable forex and stock index market
  • A Touch Bracket can expire two ways—either by touch or by time
  • In the event a floor or ceiling of a bracket is touched and expired, a new bracket will be listed
  • If expired by time, a Touch Bracket will pay out based on where a position was bought or sold and the final value of the Underlying Indicative Index at expiration

A Touch Bracket works by offering you a way to make trades by taking some of the first principles you learned, like ‘buy low, sell high’ and connecting them with an exciting way to have a built-in plan for each trade.

That built-in plan offers you a bold, new way to access markets that empower you to take positions with confidence, and simply focus on market direction and fluid price movements.

 

 

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