Limit size of contract


#1

Hi guys

I am new here

I d like to ask you one question,hope you can help me: If the price in bid is 1.50 in €/$,and i like to invest in PUT,is there a limit of contract to invest in one position?i mean can i invest in one Put with the expiry time of 5 min with 100000 contracts for example or the exchange will not accept my trade?

I hope you can help me

Best regards


#2

Are you referring to a trade on Nadex? Or Vanilla options?

If on Nadex, why would you want to do that?

I don’t think there is the liquidity to do 100000 contracts? Then again I wouldn’t really know.

Even if you could get filled and take a trade at $1.50 at 100000 contracts is an almost guaranteed way to lose $150,000. The probabilities of making any money on that trade are slim to none!


#3

Good Evening Amed,

when you open the Nadex ticket it will tell you the size of the book (see image below)

Also, Nadex doesn’t have any position limits but do have levels which are reportable (see image below)

I hope this helps.

Peter.


#4

Hi timelord

So in the first image i can open a trade with max of 50 contracts in “bid” or "offer,am i right? while in the second image the position limit is pratically the value of one contract,am i right? Maybe i don t understand very well the differences beetween position limit,size,can you explain the differences with an example please?


#5

Hey, @AHMEDDONE

I’m trying to get a little more involved here so I’ll try to answer your question as best as I understand it myself.

In the first image, you are right in that you could take a position for 50 contracts. Either on the bid or the offer side. That would clear out the book and the market makers would then re-fill with another 50. if you then did the same thing again you’d have 100 contracts total. Size is the number of contracts available but your overall position would be 100 contracts.

Nadex doesn’t have limits to the size of your position but once you get high enough (12,500 as in the second image) then there are reporting requirements.

Hope that helps.


#6

Thanks for the assist :smile:

Peter


#7

Hey Jack

Thanks for the answer,each value of yhe contract is the price of the bid or offer,right?,so for example i can buy 50 contract in “offer”(so a call) and the total value of my contracts are1600? If yes and if the contracts are ITM i will have a net profit of 1000$,am i right?

Thanks for the help guys!


#8

Hey,

I’d recommend creating a demo account with Nadex so you can open a Binary ticket and play with different values to see how things change but Darrel has loads of videos on binaries that would be a big help as well, That said…

Yes, the value of the contract is shown by the Bid and Offer prices. In the ticket above the bid is priced at $20.50 and the offer is priced at $33.

So if you entered a position for 1 contract at the offer price of $33, that’s how much it would cost you to enter the trade. Therefore 50 contracts at $33 each would be a value of $1650. That’s your cost to enter and also your potential max loss.

Your profit though would be based on the difference between your entry at $33 and the price you sold at. If you held to expiry and were correct then the profit would be the max payout of $100 minus $33 equaling a profit of $67 per contract. So on a 50 contract position your potential max profit would be $3,350.

Hopefully that addresses your question and again, I’d totally recommend viewing the videos created by Apex and opening a demo account. Never having taken on 50 contracts in my life I couldn’t speak to liquidity issues. haha.

Demo trade until your comfortable and watch the videos.

Jack.