I bought a contract on the NADEX betting that the EUR/USD would close above 1.1360 earlier this afternoon at 3 pm. I would not have been surprised had the EUR/USD closed above 1.1380 but lately I have been hedging my bets by 17 to 25 pips. Honestly other than ascertaining the broker spread based on data from OANDA, I have no quantitative reason for using the aforementioned range.
Yesterday, the markets appeared to be testing a top of 1.1407. The four-day average I calculated was 1.1406. I determined that I would use 1.1406 as my resistance level.
At 3 pm this afternoon, the contract expired at a price of 1.14279 exceeding my estimation of 1.1360. Some would argue that I should have gambled and bought a higher priced contract especially given the speculation of a close above 1.1400 discussed by at least one analyst in FXStreet. I previously calculated a forward price of 1.1641 which I admit I found suspect. If banks were delivering euros to retail purchasers at that price, then banks definitely made a profit.
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I think any lawyer advising binary options traders about the legal environment around these trades should be putting a little skin in the game themselves. This way they can speak from experience about how they addressed changes in the market and ponder the impact of changes in interest rates. Just because contracts traded on a regulated exchange are standardized does not mean that these contracts are not immune to price manipulation.
Alton Drew
9 June 2025
LEGAL ANALYSIS: For an analysis of the legal or regulatory environment surrounding binary options or event contracts, contact me at altondrew@altondrew.com to set up an appointment.
DISCLAIMER: I am not a financial advisor. These blog posts are for educational purposes only. Trading of any kind involves risks. Your trading decisions are solely your own responsibility. It is imperative that you conduct your own research and seek professional advice as necessary.
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Lawyers Write the Bets. Bankers Sell the Bets. 