Nadex (Northern American Derivatives Exchange), formerly known as HedgeStreet, is a US-based retail-focused online
binary option
A binary option is a financial exotic option in which the payoff is either some fixed monetary amount or nothing at all.Breeden, D. T., & Litzenberger, R. H. (1978). "Prices of state-contingent claims implicit in option prices". ''Journal of Busin ...
s exchange. It offers retail trading of binary options and
spread
Spread may refer to:
Places
* Spread, West Virginia
Arts, entertainment, and media
* ''Spread'' (film), a 2009 film.
* ''$pread'', a quarterly magazine by and for sex workers
* "Spread", a song by OutKast from their 2003 album ''Speakerboxxx/T ...
s on the most heavily traded
forex
The foreign exchange market (Forex, FX, or currency market) is a global decentralized or over-the-counter (OTC) market for the trading of currencies. This market determines foreign exchange rates for every currency. It includes all as ...
,
commodities and
stock indices markets.
History
Nadex originally was known as "HedgeStreet" and was based in
San Mateo, California. The Exchange was launched in 2004 offering an electronic marketplace that offered trading in
financial derivatives
In finance, a derivative is a contract that ''derives'' its value from the performance of an underlying entity. This underlying entity can be an asset, index, or interest rate, and is often simply called the "underlying". Derivatives can be u ...
to retail investors. HedgeStreet shut down its business in late 2007. Shortly thereafter, UK-based
IG Group
IG Group is an online trading provider with 290,000 active traders, offering access to spread betting and CFD trading, which allow traders to bet on the direction of equities, bonds and currencies without owning the underlying assets. Establis ...
Holdings plc. agreed to purchase HedgeStreet, Inc. for $6 million and began restructuring the exchange, its technology, and its products. In 2009, HedgeStreet was renamed as the North American Derivatives Exchange
TM (Nadex).
HedgeStreet was considered a pioneer in event futures, and the
derivatives exchange
A futures exchange or futures market is a central financial exchange where people can trade standardized futures contracts defined by the exchange. Futures contracts are derivatives contracts to buy or sell specific quantities of a commodity or f ...
is regulated in the US by the
Commodity Futures Trading Commission (CFTC).
The company operates the HedgeStreet Exchange, which launched in October 2004 and provides
traders with a place where they can
hedge against or
speculate
In finance, speculation is the purchase of an asset (a commodity, goods, or real estate) with the hope that it will become more valuable shortly. (It can also refer to short sales in which the speculator hopes for a decline in value.)
Many s ...
on economic events and price movements.
The reasoning behind the creation of HedgeStreet was that with the rise of individual private investment in stocks, there might be a similar appetite for individuals to invest in
derivatives
The derivative of a function is the rate of change of the function's output relative to its input value.
Derivative may also refer to:
In mathematics and economics
* Brzozowski derivative in the theory of formal languages
* Formal derivative, an ...
.
This focus on small investors created sufficient confusion that John Nafeh, founder of HedgeStreet, created the term "hedgelet" to help explain the company's business model.
In 2007, UK-based
IG Group
IG Group is an online trading provider with 290,000 active traders, offering access to spread betting and CFD trading, which allow traders to bet on the direction of equities, bonds and currencies without owning the underlying assets. Establis ...
announced intent to acquire HedgeStreet
and later in the year completed the purchase of the company. After the purchase, Nadex began to offer binary options similar to those already available on IG's platform.
In December 2021,
Singapore
Singapore (), officially the Republic of Singapore, is a sovereign island country and city-state in maritime Southeast Asia. It lies about one degree of latitude () north of the equator, off the southern tip of the Malay Peninsula, bor ...
-based
Crypto.com announced their intent to acquire Nadex and the Small Exchange from IG Group.
In March 2022, Crypto.com completed the purchase.
See also
*
Prediction market
Prediction markets (also known as betting markets, information markets, decision markets, idea futures or event derivatives) are open markets where specific outcomes can be predicted using financial incentives. Essentially, they are exchange-trad ...
References
{{reflist
Companies based in Chicago
Financial services companies established in 2004
Economics websites
Prediction markets
Futures exchanges