Nadex self-certifies Dogecoin Cryptocurrency Touch Bracket Contracts
North American Derivatives Exchange, Inc. d/b/a Crypto.com | Derivatives North America (CDNA) has self-certified the terms and conditions for Dogecoin Cryptocurrency Touch Bracket Contracts.
The Exchange previously self-certified Touch Bracket Contracts on Bitcoin (BTC) and Ether (ETH) on October 28, 2022, as well as BTC and ETH Event Contracts on April 10, 2023. In addition, the Exchange has listed both Binary Contracts and Call Spread Contracts based on the Underlying bitcoin market at various times since 2014.
Since launching the BTC and ETH Touch Bracket Contracts in 2023, combined trading volumes of these contracts totals over 400,000 contracts. Therefore, the Exchange continues to expand its cryptocurrency commodity derivative product offerings to meet public demand for diverse and regulated products.
The new DOGE Crypto Contracts will be cash-settled and will operate in the same fashion as the Exchange’s currently listed Touch Bracket Contracts, including the Bitcoin and Ether Touch Bracket Contracts. Touch Bracket Contracts are not only quite popular in markets with high volatility, such as the cryptocurrency markets, but due to their unique structure, inherently minimize the possibility of contract manipulation.
The value of the DOGE Crypto Contracts is based upon the pricing characteristics of the cryptocurrency commodity and will be as $100 for each DOGE Crypto Contract. The Expiration Value of the DOGE Crypto Contracts will be the Indicative Index value calculated by the Exchange at the time that Indicative Index Value either equals or is greater than the Contract’s Ceiling, is equal to or less than the Contract’s Floor, or at the listed Expiration if the Contract is not knocked- out early.
Because a Touch Bracket Contract will always expire concurrently with the Indicative Index Value that will be used to determine the settlement of the Contract, it is impossible for the final Expiration Value to be published prior to the expiration of the Exchange Contract. No trading in the listed Contract will occur following expiration of the Contract.
Consistent with all other Contracts currently traded on the Exchange, the DOGE Crypto Contracts will be fully collateralized.
The Exchange plans to list the DOGE Crypto Contracts based on the Underlying DOGE cryptocurrency commodity market and settle the DOGE Crypto Contracts using data from the “ICE Cryptocurrency Data” feed (“ICE Crypto Data”’), distributed by ICE Data® Connectivity and Feeds, Inc. (“IDCF”). IDCF is part of the Intercontinental Exchange group of entities.
In 2018 IDCF partnered with Blockstream Corporation, Inc., a leading provider of blockchain technologies, distributed systems, and crypto-financial infrastructure, to launch the ICE Crypto Data. The ICE Crypto Data is an aggregation of comprehensive multi-asset data from the most widely and actively traded cryptocurrencies from leading trading venues, markets, and exchanges, compiled by Blockstream and distributed by IDCF.
The ICE Crypto Data currently includes data from 31 trading venues, with 9 venues contributing data pertaining to DOGE cryptocurrency commodity. The Exchange can customize the data it receives by selecting any number of the contributing venues.
The Exchange made its selection of venues based on several factors, including CoinGecko’s Trust Score rating, the Underlying Trading Venues’ daily spot volume ranking, AML and KYC policies implementation, regulatory requirements, and the venue’s location in order to provide global coverage.
The ICE Crypto Data includes a number of data points to aid in the monitoring of the relevant crypto markets such as price discovery, historic data and full-depth market by price and venue, and a 24-hour market overview. The Exchange will periodically review the Underlying Trading Venues it has selected to determine the venues’ continued appropriateness for inclusion in the Indicative Index and may add or remove trading venues as appropriate.
The Exchange Crypto Contracts are fully regulated and benefit the public interest both as a hedging tool and as speculative trading instruments. Like all the Exchange Contracts, the DOGE Crypto Contracts will be fully collateralized at the time the transaction is entered. Additionally, the Ceiling and Floor function as a guaranteed stop. Thus, the trader is aware of the maximum risk to enter the transaction and the risk is limited by virtue of the predetermined Ceiling and Floor prices.
The Underlying cryptocurrency commodity markets are traded 24 hours per day, 7 days per week. The Exchange has selected the specific Underlying Trading Venues from which to obtain prices to include in the calculation of the Indicative Index Value that operate from different regions globally, in order to mitigate against the possibility of less activity in the Underlying markets at any given time due to the time of day.
The Exchange will have at least three dedicated Market Maker liquidity providers who will quote a two-sided market pursuant to the terms of the Market Maker Agreement and subject to the rules of the Exchange. Non-Market Maker Trading Members will have a Position Limit of 250 Contracts.
In order to provide sufficient liquidity, Market Makers will be subject to Alternative Position Limits of one-thousand times the standard 250 lot limit, which shall apply on a per strike basis rather to the entire Class of Contracts. Market Makers will also be relieved of their quoting obligations once they have acquired a position of 500 Contracts but will be required to resume their obligations once their position has fallen below 500 Contracts.
Regular trading in the DOGE Crypto Contracts will begin at 6:00 pm ET on Sunday evening, and expire at 4:15 pm ET on Friday afternoon, unless knocked-out prior to the stated Expiration time.
These contracts will be listed on or after trade date June 26, 2023.