Whether you are new to trading binaries or you are seasoned trader, it is important to understand how both contracts and pricing work on the Exchange. There are many features that are unique to the Cantor Exchange and, further, unique to a specific trading interface. Please read below to find out more about:

Contracts

Pricing

 


Contracts on the Exchange

Each digital option is entered into as a contract on the Exchange.

 

A forex/metals contract is an agreement between two Participants with opposing positions on the market (that is, matching 1 Participant with a Buy position with 1 Participant with a Sell position). The Cantor Exchange serves as an anonymous electronic meeting place to match buyers and sellers in the market.

 

Each contract settles at $1 on the Cantor Exchange.

 

If you are correct or in-the-money at the time of the designated expiry, your contract is worth $1.

An in-the-money Buy/Ask/Above contract has a strike price lower than the current market value of the underlying asset.

An in-the-money Sell/Bid/Below contract has a strike price greater than the current market value or the underlying asset.

 

If you are not correct or out-of-the-money at the time of the designated expiry, your contract is worth $0.

An out-of-the-money Buy/Ask/Above contract has a strike price higher than the current market value of the underlying asset.

An out-of-the-money Sell/Bid/Below contract has a strike price lower than the current market value of the underlying asset.

 

If you are at-the-money at the time of the designated expiry, your contract is worth $.50.

An at-the-money contract has a strike price that is identical to the current market value of the underlying asset.

 

 


Pricing on the Exchange

The price of each contract can be thought of as a percentage likelihood the given event will occur.

 

For example, if Participant A purchases a Buy position for $.80 for Event 1, then Participant A thinks Event 1 has at least an 80% chance of occurring. The Exchange then anonymously matches Participant A with Participant B, who thinks Event 1 has a 20% chance of not occurring, and therefore purchases a Sell position for $.20.

 

Each contract settles at $1 on the Exchange. When the Exchange anonymously matches two forex/metals trading Participants in the market for a contract, the total will always be $1 or 100%.

 

Please note: If you are using the TradeWx trading interface, please visit TradeWx Help for pricing information specific to the Cantor Exchange weather market.

 

 


For more information about Contracts & Pricing, contact us!