Comment Text:
What I missed to include in my earlier comment is that I thought all along it is unlawful for Nadex to list ‘event’ contracts, per HedgeStreet’s (predecessor of Nadex) Application to the CFTC for Designation as a Contract Market and Registration as a Derivatives Clearing Organization .
In order to provide assurances to CFTC’s concerns about ‘event’ contracts — considered surrogates for gambling activities such as contracts on outcomes of gaming and sporting events — HedgeStreet amended the first paragraph of its Application on December 19, 2003 by removing "event" contracts upon re-submission of that Application, as follows:
[HedgeStreet, Inc. ("HedgeStreet") submits this application (the "Application") to the Commodity Futures Trading Commission (the "Commission") for designation as a contract market and registration as a derivatives clearing organization. HedgeStreet proposes to provide its members with fully electronic, non-intermediated trading over the Internet in cash-settled, European-style binary options on various proprietary and non-proprietary indices, rates, risks, measures, differentials, indicators, values, contingencies, events, occurrences, or extents of an occurrence.]
Last but not least, to predict the behavior and intentions of Nadex in the future — if it would be granted approval of its request — one only has to ask ONE question: What type of business is the British parent of Nadex (IG Group) in? The odds are 100 to 0, it is Gambling!
John Nafeh, Ph.D.
Founder of HedgeStreet (predecessor of Nadex)
