When trading on Nadex or a broker or exchange is there anyway to know for sure that you are trading with a market maker when entering and exiting trades?
As opposed to what? Another trader or Nadex itself?
I believe as an exchange you are always paired up with another buyer/seller. Nadex doesn’t trade with or against you, they just collect the transaction fees. The market maker establishes the book to provide liquidity but I don’t think you are ever trading against the MM. I could be wrong, but that’s how I understand it.
The MM is not trading “against” you, but he may be the one buying your sell orders or selling your buy orders. They instantly make the bid/offer spread as long as there is a buyer or seller on the other side. Think of it this way… there is you the seller, Mr. Buyer and the market maker. Let’s assume the market does not move. You sell YM at 15600 and the MM is the buyer. Mr. Buyer puts a buy order in at 15604. The MM sells to Mr. Buyer and made the 4 tick bid/offer spread. So, the MM automatically makes that profit by being willing to provide liquidity. Where we sell at the bid and buy the offer, he does the opposite. This example may be a bit simplistic because the market can move against the MM. So he is trying to get the other side of the trade ASAP.
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