Nadex to introduce Market Orders with Protection

North American Derivatives Exchange, Inc. (Nadex), part of IG Group Holdings plc (LON:IGG), has just presented its plans to add one more order type.

The addition is called Market Order With Protection (“MOP”) and the relevant application for regulatory approval has already been submitted to the Commodity Futures Trading Commission (CFTC).

A MOP order is a request submitted to the Exchange to buy or sell a certain number of contracts, in a particular product offered by Nadex, at the current displayed market price at the time the order is submitted. However, in case that displayed market price is no longer available when Nadex receives the order, the MOP order includes a “Tolerance Protection” level.

The latter is a pre-determined number of points, expressed as a dollar value, away from the displayed market price that will be acceptable to fill a MOP order in whole or part.

The introduction of the new order type is set to offer traders greater flexibility in their trading strategies and to enhance opportunities to cut risk.

Given the 10-day review period set forth in CFTC regulations, the new orders will be available no earlier than September 23, 2015.

To view the official announcement by Nadex, click here.

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