The calculated level of the underlying market at Expiration, as determined by Nadex (except for Economic Events where it is determined by the relevant source agency).

Nadex uses different calculation procedures for normal and highly active markets, to ensure an accurate settlement outcome.

**Highly active markets:**

**FX (Currency):**

Where 10 or more midpoints are collected in the last 10 seconds before expiration, Nadex includes all midpoints collected during that time period in the data set used to calculate the contract’s expiration value. We remove the highest and lowest 30% of midpoint prices. If this would result in a non-integer number of prices, we will round down to the nearest integer the number of prices to be removed. We then average the remaining midpoint prices and round to one decimal point past the precision of the underlying market.

**Indexes & Commodities:**

Where 25 or more trades are collected in the last 10 seconds before expiration, Nadex includes all trades collected during that time period in the data set used to calculate the contract’s expiration value. We remove the highest and lowest 20% of trades. If this would result in a non-integer number of prices, we will round down to the nearest integer the number of prices to be removed. We then average the remaining trade prices and round to one decimal point past the precision of the underlying market (except for the Wall Street 30 which will be rounded to the point of precision of the underlying market).

**Normal markets:**

**FX (Currency):**

If it takes more than ten seconds to collect 10 or more midpoints in the data set, Nadex calculates the expiration values for spot FX as follows:

- Take the last 10 midpoints (10 pips wide or less) in the underlying market, before expiration
- Remove the highest 3 prices and lowest 3 prices.
- Take the arithmetic average of the remaining 4 prices and round to one decimal point past the precision of the underlying market

**Indexes & Commodities:**

If it takes more than ten seconds to collect 25 or more trades in the data set, Nadex uses the following process to calculate the expiration value:

- Take the last 25 trade prices in the underlying market
- Remove the highest 5 prices and the lowest 5 prices
- Take the arithmetic average of the remaining 15 prices and round to one decimal point past the precision of the underlying market (with the exception of Wall Street 30, which is rounded to the same precision as the underlying market)

**Nadex Economic Event Contracts:**

The expiration value is the figure released by the designated reporting body.

The market prices we use to calculate the expiration values for index and commodities contracts are obtained through a data feed from Reuters. If Reuters is unavailable, we may obtain market pricing data through Bloomberg or another data provider that we deem appropriate under the circumstances.

The market prices we use to calculate the expiration values for Forex contracts are obtained through a proprietary data feed (“NadexFX”) comprised of quotes from well-known banking institutions. If NadexFX is unavailable, we may obtain market pricing data through Bloomberg or another data provider that we deem appropriate under the circumstances.

Nadex calculates the Expiration Value for all binary options and spreads using a consistent, transparent process. Both binary and spread contracts will end with the same expiration value if they both have the same underlying market and expiration time. Why? They are both derivatives of the same underlying market and that market can only have one price at a particular time.

Why is that important for you to know? Some binary options broker-dealers are not transparent. You simply have to take their word that they are giving you a fair outcome. As a CFTC-regulated, US-based financial exchange, Nadex plays by strict rules of professionalism and fairness. You can trust our pricing.

The settlement calculations for futures and currencies are slightly different:

## Futures Expiration Value Calculation

- Take the last 25 trade prices in the underlying market
- Remove the highest and lowest five prices, leaving the middle 15
- Average the remaining 15 prices and round to one decimal point past the precision of the underlying market. (For the Wall Street 30 we round to the same precision as the underlying.)

## Forex (Currency) Expiration Value Calculation

Unlike futures, which are traded on a central exchange, currencies are traded on a global network. Therefore the expiration value calculation is different, but the goal is the same: to get an accurate picture of the market and determine the trade outcomes fairly. Nadex calculates the expiration values for spot FX with different calculations under normal conditions and for highly active markets.

- When 10 or more midpoint prices between the best bid and offer (10 pips wide or less) are collected from the underlying market in the final 10 seconds before expiration of the contract:
- Nadex takes all midpoints collected (10 pips wide or less) and removes the highest and lowest 30% of prices. If 30% of the data set is a non-integer, the nearest rounded-down integer is used. We then average the remaining prices and round to one decimal point past the precision of the underlying market.
- If it takes more than 10 seconds to collect at least ten midpoint prices between the best bid and offer (10 pips wide or less) leading up to expiration of the contract:
- Nadex takes the last 10 midpoints (10 pips wide or less) before expiration and removes the highest and lowest 3 prices. We then calculate the average of the remaining 4 prices and round to one decimal point past the precision of the underlying market.

Nadex obtains its underlying market data from a proprietary forex data feed based on data from ten major banks.

## Nadex Economic Event Contracts

In addition to futures and currencies, Nadex offers binary options on economic events. The expiration value is the figure released by the designated reporting body. For example, the weekly jobless claims number is reported by the US Bureau of Labor Statistics.

## Spreads

Since binary options are all or nothing, if the option moves in the money—above the strike price—by even the minimum amount, you still receive the full $100 payout. For spreads, by contrast, a small increase or decrease in price just before expiration will have a relatively small impact on your final payout.

Nadex offers roughly 10,000 contracts per day, which expire at various times throughout the day. Below is a platform screenshot showing the Nadex US500 binary options and spreads expiring at 2pm ET. At 2pm Nadex will calculate the expiration value of every one using the same weighted average of the last 25 prices of the Indicative Index (last column).

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