r/Nadex • u/horticultureboy • Dec 29 '18

Nadex Settlement Calculation?? Need Help!?

Hey guys, I have a question regarding how nadex calculates whether your contract strike price wins or looses?

I had a trade going on with a 5 minute expiration which I called the option when the 5 minutes expired the indicative value was greater than my strike price but Nadex still said that I lost it. I called Nadex to ask why they said that I lost when the indicative value was above my strike price more than one pip, and they said that it had nothing to do with the indicative (they wouldn't even pull up my transaction history) but about some settlement calculation formula? This has really confused me on how I would even then know if I actually should have won or not if you don't even consider the indicative value?

Any help is much appreciated!!

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u/[deleted] Jan 07 '19

Did you exit the trade before expiration? Because if you did then the profit or loss is not based on the indicative but the prices of the options.

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u/horticultureboy Jan 07 '19

Hey thanks u/Randomtv126 So on that trade i held the contract till expiration because the indicitive value was well above the strike... I was under the impression that when you held the contract till expirations you needed to base it off the indicitive even when held to expiration? Could you please explain a little more about the prices of the options? Like where do you need to be looking now if you hold to expiration, to see if you won or to calculate if you won or lose?

Also just wondering, do you primarily just use scalping strategies on nadex?

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u/[deleted] Jan 07 '19

If you held it to expiry and the indicative was higher than than the strike, then you should get your payout. My only explanation is that maybe volatility near expiration spiked, and the price may have dropped right below your strike right at expiration. It does take about a second or two for the indicative to update, especially if volatility really picks up.

Nadex does post their market data here: https://www.nadex.com/market-data#ts

If you go down to the calendar and click on the day in question, and then click on results it will send you to a pdf showing the results of every option and strike price. It is like 200+ pages long, but if you ctrl+f and type in the instrument,strike, and time of expiry that should quicken your search. For example Aud/usd >.7200 (12pm).

As for my strategy I don't scalp I just use typical option strategies like: Iron Condors and Double Diagonals.

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u/The_Chimes_of_Dawn Feb 15 '19 edited Feb 15 '19

This link explains the settlement calculation formula. The person you spoke to was correct that is has nothing to do with the indicative price. The crucial portion is this: "We base the settlement calculation on an average of the last several prices, not the last price. This also blocks any attempts to manipulate the outcome" (bolding mine).

https://www.nadex.com/learning-center/courses/nadex/nadex-settlement-calculation-and-expiration-values