Does Nadex charge more on bull spreads than it says on straddle?

#1

last night I set a take profit of $250 on an early morning London straddle on Nadex using 10 lots both ways. The spread was a 150 point spread for 2 hrs(GBP). I figured $250 would be enough to cover the one that didn’t go my way + the $27 in fees I would pay with the 2 +$9 when closing early to take profit and still make $100. As you can see in the picture that $250 profit should have covered $110 for the one that didn’t go my way as well as $27. but my account only showed an increase of about $50 or so I don’t recall I wish I could have taken a picture of my account balance to show the exact amount. I have been meaning to because every single trade I’ve taken with this strategy I feel like I should be making more out of it. does Nadex charge a few hidden pip fees??

<img src=/uploads/db0876/1220/583245312879bf05.jpg">

#2

okay here is the next trade I took. this is bogus. this is not at all what I thought this was when I saw videos explaining the cost and amount of $ needed to be made on both sides to profit.

my starting balance before this trade was 25,209. When the trades were over (you can see what they were on the attached image, I was down by 3 bucksto 25,206. I was under the impression that once you were in profit in 1 direction then the negative amount you started with for going that direction (in this case $90 for the buy side), would be added back to my balance. instead I see that its actually still having you down BY BOTH!..this isnt what was explained in your videos :frowning:

#3

hi Justin its hard to see your numbers. Can you repost them using jing?

#4

sorry, can you see them here?

http://oi60.tinypic.com/28rkrxv.jpg9 (first one)

(second one)

#5

Hi Justin on the first one it looks like its missing the sell to close or settlement for your Buys.

What I figured on your Sells was that you paid $80 total to get in for -10 contracts. Your buy to close was $250 less your original $80 gives you $170 profit that direction.

If your Buys settled at 1.6705 (below the floor of 1.6730) then you would have lost on your +10 Buys so you would have lost $110. Which calculating both ways…$170 profit on the sells, less the $110 loss on the buys would leave you with $60 profit not including fees.

I am learning myself so Darrell or one of the more expert traders can confirm and give you more info than I.

#6

My calculations on your second trade…

You paid $50 to get in -10 for your sells which settled at 0 so you lost $50. You paid $90 to get in +10 for your buys which settled at $164. Your profit $164 less your loss on the short side -$50 less your cost for the longside $90 = $24 But your fees were $9 for the +10 buys and $9 for the -10 shorts and then $9 for settling the +10 buys profitable so a total of $27. $24 profit less -$27 fees = loss of $3 so the balance going down by $3 would be correct

#7

To go for a 1:1 on a spread as I understand it…

Cost on your Buy

  • Cost on your Sell = Total Cost of Spread

Total Cost of Spread

  • Cost on your Buy side = profit amount needed for a 1:1 if your sell side is profitable

Total Cost of Spread +Cost on your Sell Side = profit amount needed for a 1:1 if your buy side is profitable

Then take the profit amounts and figure your Take Profits accordingly. If you are doing a news trade, you have to know the expected move and make sure your Take Profit is within the expected move to have a 1:1.

Again I am learning and Darrell and one of the more expert traders should confirm and will tell you more.

#8

sorry i added a 9 to the end the link for the first is

and yeah see thats where i thought that your profit would be added on if it went in your direction. because to begin with it already starts you off at a negative on the spreads. I thought the cost of the buy or sell side would be added back to the direction that it went after the trade was over was what I was getting :(.

#9

A few quick things. It’s is a contract not a lot. If referring to it ask a lot it would be a mini lot.

Nadex only charges fees they are an exchange they don’t make money on pips or bid ask spread. The market makers attempt to make money on bid ask spread .

I teach to not worry about fees as they pale in comparison and there is nothing like losing 250 as you wanted to make another $25. Yes fees add up bit not as quickly as 1 loss.

On every exchange based or fx market yiu are always down the bid ask spread upon entry it’s how all trading works.

I’m guessing by all you post that you did not review the news trading plan.

The news came out at 4:28 and you entered a 4 am expiration that expired before the news was released.

Make sure your clock on your computer is set to ET then close and reopen nt7 otherwise you will mix up tomes with nadex expirations and this will be expensive.

Also you entered after midnight at 2:36 am and the plan says to enter be for midnight. This is because the often the market moves early it’s not a reason to take an entry earlier simply the reason for when we enter.

You used 4 am and it said to use 7 am as the market usually takes longer to move that’s why we don’t use 5 or 6 am.

You went for a 25 profit it says we are expecting a 70 pip move and we nailed it from midnight to 7 our max move was just over 70.

Risk is the combination of both risk. Always think in contracts of 1 so you can use this number for take profit.

For a 1 to 1 you need to male this risk of both sides plus the risk on the other side and you need to ensure that take profit price is within the expected move distance stated ie the take profit on a short should be 70 pips below or higher of where the fx is at that time.

You can’t trade every annoucement and need proper expectations use the news plan it’s specific and the work has been done for you. If yiu deviate from the plan and you have not went back on all the stats your just guessing.

Also often in the nadex trading pit that comes with p3 and paying elite members we often discuss the trades live like I did last week.

Hope the tips above help.

#10

Nothing is bogus your randomly doing straddles. Im all for questions and encourage them but ask questions versus making assumptions. It will serve you better and save you a lot of frustration. Good thing is you are demoing and makong tye mistakes in demo which i highly encourage.

The plan did not say to do eur usd as it does not move often enough so this randomely picked trade was a total gamble with no stats to back it up. So the trade made was bogus. Nothing explained in the videos was inaccurate but you have to follow the plan or your just buying the straddle and hoping.

Bid ask spread mist be made back. There must be proper timing and expiration and instrument chosen. The straddles must be able to take profit within the expected range. implied volatility will go down after the release but so long as you pick the correct instrument at the right time with the right expiration amd ensure take profit is within the range your odds of profit do increase.

The videos show you how to do a straddle. That is a strategy. We apply it to news with a specific system and style stats to know what to do and not do. You simply are not following the plan. Top menu news news trading plan. Not saying they all work but in both trades you totally deviated from it.

[quote=justin7]okay here is the next trade I took. this is bogus. this is not at all what I thought this was when I saw videos explaining the cost and amount of $ needed to be made on both sides to profit.

my starting balance before this trade was 25,209. When the trades were over (you can see what they were on the attached image, I was down by 3 bucksto 25,206. I was under the impression that once you were in profit in 1 direction then the negative amount you started with for going that direction (in this case $90 for the buy side), would be added back to my balance. instead I see that its actually still having you down BY BOTH!..this isnt what was explained in your videos :frowning:

[/quote]

#11

See the above…

[quote=justin7]sorry i added a 9 to the end the link for the first is

and yeah see thats where i thought that your profit would be added on if it went in your direction. because to begin with it already starts you off at a negative on the spreads. I thought the cost of the buy or sell side would be added back to the direction that it went after the trade was over was what I was getting :(.[/quote]

#12

thankyou darrell for the help… if I said lots I meant contracts, I’m use to regular forex. I also just thought that lets say its $6 for the buy spread and $7 for the sell spread. I thought it worked that lets say it goes down and comes into profit for the sell spread at say $20, then that the $7 risked for the sell spread would be given back and the only thing subtracted from the $20 would be the spread that didnt go your way the other direction (buy spread for $6, plus the 90 centsx3, so $8.70).

#13

I figured you meant contracts. But just for clarity when I am responding i keep in mind (other traders as well that may not know). Also on the lots remember say GBP/USD would be like a mini-lot on a spread versus a full lot.

Buy Spread = $6.00 risk…

Sell Spread = $7.00 risk…

comes into profit on the sell spread at $20 - so y our saying the underlying market dropped and the spread’s quote on the offer side is now 20 ticks (20 dollars) lower than where you bought it…

If you close it - you would get a credit of $20 and a credit of $7.00 so you would have a credit of $27 for closing the sold spread (less exchange fees) as you get the $20 you made and the $7.00 risk you put up.

if you held the other spread till expiration - and say the market stayed below the floor of the bought spread as of expiration and you did not close it early - then $6.00 would not be credited back to your account

after all is said and done you would be up $27 less $6 for a net $21 (not account for fees) add in fees .90 on bought entry .90 on sold entry add in .90 on early exit on sold contract - (no fee on bought one if it expired under the floor with no value at settlement) so $2.70 in fees - net return $18.30 on a $13.00 risk after fees not to bad

The bought spread is not automatically closed when you close the sold spread. This is good as it could go back up and you could get your risk capital back or even profit on the other side. Not often but it does happen and there is no reason to close the bought spread when its at max drawdown…

Good questions… The best way to clear any misconceptions is just ask i will gladly help. If anything is confusing ask that is why the forum exist :slight_smile: Thank you for taking the time to use it it helps everyone.

#14

but thats not what I’m getting back on my trades. I’m getting credit of +$20 MINUS the $7 it isn’t added back. so I’m getting $20 closing the trade minus the $7 as well as $6 and $2.70 for a net return of $4.30 not $18.30.

[quote=darrell]I figured you meant contracts. But just for clarity when I am responding i keep in mind (other traders as well that may not know). Also on the lots remember say GBP/USD would be like a mini-lot on a spread versus a full lot.

Buy Spread = $6.00 risk…

Sell Spread = $7.00 risk…

comes into profit on the sell spread at $20 - so y our saying the underlying market dropped and the spread’s quote on the offer side is now 20 ticks (20 dollars) lower than where you bought it…

If you close it - you would get a credit of $20 and a credit of $7.00 so you would have a credit of $27 for closing the sold spread (less exchange fees) as you get the $20 you made and the $7.00 risk you put up.

if you held the other spread till expiration - and say the market stayed below the floor of the bought spread as of expiration and you did not close it early - then $6.00 would not be credited back to your account

after all is said and done you would be up $27 less $6 for a net $21 (not account for fees) add in fees .90 on bought entry .90 on sold entry add in .90 on early exit on sold contract - (no fee on bought one if it expired under the floor with no value at settlement) so $2.70 in fees - net return $18.30 on a $13.00 risk after fees not to bad

The bought spread is not automatically closed when you close the sold spread. This is good as it could go back up and you could get your risk capital back or even profit on the other side. Not often but it does happen and there is no reason to close the bought spread when its at max drawdown…

Good questions… The best way to clear any misconceptions is just ask i will gladly help. If anything is confusing ask that is why the forum exist :slight_smile: Thank you for taking the time to use it it helps everyone.[/quote]

#15

Thats what I’m getting at you are wrong.

If you risk $7.00

And close it for a $20 profit

You get $27 put back in ($20 profit plus the $7.00 risk) (less fees)

If you lose $6.00 on the other side that is not put back in

stated here:

"Sell Spread = $7.00 risk…

comes into profit on the sell spread at $20 - so y our saying the underlying market dropped and the spread’s quote on the offer side is now 20 ticks (20 dollars) lower than where you bought it…

If you close it - you would get a credit of $20 and a credit of $7.00 so you would have a credit of $27 for closing the sold spread (less exchange fees) as you get the $20 you made and the $7.00 risk you put up."

#16

I understand darrell but that’s not what I’m getting back on my trades. Nadex isn’t adding back the one that goes in my direction instead its entirely going against me and subtracted once the profit is hit instead of being added. It’s really quite a big swing.

it’s happening like what kellie said

"My calculations on your second trade…

You paid $50 to get in -10 for your sells which settled at 0 so you lost $50. You paid $90 to get in +10 for your buys which settled at $164. Your profit $164 less your loss on the short side -$50 less your cost for the longside $90 = $24 But your fees were $9 for the +10 buys and $9 for the -10 shorts and then $9 for settling the +10 buys profitable so a total of $27. $24 profit less -$27 fees = loss of $3 so the balance going down by $3 would be correct"

#17

Sorry for any misunderstanding but your math does not add up

Here is a sample of a screenshot of a trade I did on the AUD/USD

As you can see my sell risk was $60 (60 was deducted) $9.00 fee on sell (9 was deducted) My Buy Risk was $240 (240 was deducted) $9.00 fee on buy (9.00 was deducted) I bought to close my sold trade and was credited $600 (sold 10 at .9004 and bought back at .8950 10 minutes later for a pip profit of 54 pips x 10 540 pips = $540 + i risked $60 on the sell side so i was given that back and $600 was credited) (600 was credited) $9.00 fee on the buy to close the sold contract (9.00 was deducted) The 10 long trades the AUD/USD settled under the floor so settlment payout was 0 I had 0 remaining short trades as of expiration so settlment payout was 0

Math -60 (short) -9 (fee) -240 (long) +600 (closed short) -9 (fee) +0 (no payout OTM) +0 (no positions no payout as closed before expiration)

Net Profit $282.00

02.20.2014-18.23.png1059x371

#18

Kellie’s math is right - you should have lost $3.00 on that second trade

I think i figured out the error you are making in your math…You are trying to give yourself double credit.

You are accidentally giving yourself double credit on the initial risk.

I worked up the math on the trades myself step by step - then compared them to the nadex order history you posted and they match up perfectly.

Notice where the arrows are I believ ethis is where you are making the mistake

ie your trying to add sold profit + returned risk less bought loss for net profit - which is not the case

Bottom line profit is going to be profit minus loss less fees

You mention your “balance” but you have not posted a single screenshot of your balance so I can only assume you thought your balance should have been more - and then investigated and then based on the transaction history and gvae yourself double credit on the “winning” sides original risk therefore thinking your balance was incorrect. The payout amounts are 100% correct and the balance as adjusted 100% correct

you made 170 on the sold and got 80 back that is the 250 credit you see on the gbp/usd = the total risk + profit was returned to you

you made 74 on the bought and got back the 90 risked that is the +164 that you see on the eur/usd = the total risk + profit was returned to you

02.20.2014-18.59.png755x695

I hope this makes sense. Let me know if not

Darrell