Nadex self-certifies XRP Crypto Touch Bracket Contracts
North American Derivatives Exchange, Inc. d/b/a Crypto.com | Derivatives North America (CDNA or Nadex) has self-certified the terms and conditions for XRP Crypto Touch Bracket Contracts.
The Exchange has self-certified multiple cryptocurrency contracts in the past, including Touch Bracket Contracts on Bitcoin (BTC) and Ether (ETH) on October 28, 2022, Touch Bracket Contracts on Litecoin (LTC) and Dogecoin (DOGE) on June 21, 2023, Touch Bracket Contracts on Bitcoin Cash (BCH) on September 26, 2023, and BTC and ETH Event Contracts on April 10, 2023.
In addition, the Exchange has listed both Event Contracts and Call Spread Contracts based on the Underlying bitcoin market at various times since 2014.
Since launching the BTC, ETH, LTC and BCH Touch Bracket Contracts in 2023, combined trading volumes of these contracts totals over 680,000 contracts. Therefore, the Exchange continues to expand its cryptocurrency commodity derivative product offerings to meet public demand for diverse and regulated products.
The new XRP Crypto Contracts will be cash-settled and will operate in the same fashion as the Exchange’s currently listed Touch Bracket Contracts, including the BTC, ETH, LTC, and DOGE 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.
A Touch Bracket Contract is a type of Variable Payout Contract and is similar to a Call Spread in that it contains a predetermined Ceiling and Floor price level. However, unlike a Call Spread Contract, if the Underlying market, as reflected in the corresponding Indicative Index, for a Touch Bracket Contract equals or moves through (i.e., “touches”) either the Ceiling or Floor level of a Touch Bracket at any time prior to the listed Expiration time, the Touch Bracket Contract will immediately expire.
In the event the Underlying market does not touch the Ceiling or Floor prior to its listed Expiration time, the Touch Bracket will expire at the listed Expiration time, which will occur on the last trading day of the week. Accordingly, the Exchange categorizes its Touch Bracket Contracts as “weekly” Contracts.
The value of the XRP Crypto Contracts is based upon the pricing characteristics of each cryptocurrency commodity and will be as $100 for each XRP Crypto Contract.
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 XRP Crypto Contracts will begin at 11:00 pm ET on Friday 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 October 3, 2023.