OK, red herring 11? What does paying to use the name have to do with how I get treated as a trader again?
Correct me if am wrong, but they use a proprietary data feed for FX to calculate settlement price. Is that correct?
Are the trades on Nadex backed by options/futures contracts in the open market? That's all you need to show me. Otherwise, all you're doing on Nadex is betting A or B will happen...and you're doing that against the house...it's the same as any of these other gambling websites that bet on elections and other events.
I am pretty sure the MM is delta hedging these, at these BO spreads they would be making money. Plus, the actual vol exposure for a digital is very small.
I don't even think they need to delta hedge..they can just play their clients' positions off each other like any good bucket shop would. With a 15% spread...you don't need much hedging.
I should have more accurately said you can take either side of any trade, and with a binary "selling" the long is the same as "buying" the short since it is binary. You and I can market make same as them all day long. If you haven't yet signed up for an account I highly recommend doing it for fun next time you have a slow day. I think it's a minimum $100 to fund and I think you'll find it fun to play around with. If 6% is usurious (I don't know where 15% came from, I always see a $6 or less spread) than its an opportunity for you since you can compete equally. You can even set yourself up with a FIX connection. I know you do this for a living and I'd love to have you on there as another MM!
This is going to be reported as promotion...you should list yourself as a vendor if you're going to entice ppl in this shady work.