Cantor who? Exchange what? This used to be the phrases people would say anytime I mentioned Cantor Exchange. To be honest, I knew about them for a long time and just kind of blew them off until May of 2015, which was not that long ago. I did not know what was going on behind the scenes and I am so glad I found out becasue the opportunities at Cantor Exchange are getting ready to molly whop the competition very soon.
I have not clue whether Cantor Exchange will surpass Nadex in trading volume in a few years but I can tell you with 100% certainty that it is possible. With all the innovations going on, who knows what the future holds? Right now, Cantor Exchange is the underdog. Actually Underdog is an overstatement. They are doing everything right, though. My dad always told me, ” Son, when you do the right thing, success will surely follow.” so let us take a few minutes and examine why I think Cantor Exchange will be the best possible binary options trading facility in the very near future.
First I will explain what the exchange is in a nutshell:
Cantor Exchange is a subsidiary of Cantor Fitzgerald that offers an exchange to trade CFTC regulated binary options in a similar fashion to their main competitor, Nadex. They offer contracts that are fixed asset risk so that any trader may participate without the worry that a market spike will blow out their account. This fixed risk trading has appealed to many traders and is building momentum as of the date of this article. Each contract traded through Cantor Exchange has a maximum risk of only $1.00, even if the market spikes against a trader by 1,000 points.
Here are a few reasons why Cantor Exchange is attracting attention:
1. Liquidity is building at Cantor Exchange
A few months ago, liquidity (the number of active traders involved in actual contract trading) was extremely small. You could see very limited amounts of trading on Cantor Exchange just 6-8 months ago as detailed in the video here https://youtu.be/pXk28LyD8Uk?list=PLygwgAo2bDYV9oyN7WKv1bw7DC7-bfizj but today we are seeing liquidity increase. This is important becasue if you want to get in or out of the market, liquidity is crucial. Just a few days ago, I snapped this screenshot of 600 contracts being offered. This is about 600% more than what was being offered a few months ago.
2. $1.00 contracts allow smaller traders to participate
Every contract is worth $1.00 maximum. This allows even the smallest retail players to get involved in active trading on Cantor Exchange. Let us take a look at 2 scenarios and you will see why this is important and why it is opening the door for many more traders. Scenario #1… Jack has a trading account of $10,000 so he is not worried about a contract of $100 and therefor he trades without worry. Scenario #2… Jill is learning to trade and has an account of $100. Since Cantor Exchange offers contracts of $1.00 each, she can trade in amounts so small that she will risk no more than 1% of her total account on a trade. Better yet, she will risk way less in most instances. If she chose to buy an out of the money contract for 20, then she is risking 0.20% of her account per contract. This is just awesome from a risk./reward standpoint.
3. Rolling Strikes allows traders to trade outside of normal zones
This is, by a long shot, the best reason why I just fell in love with Cantor Exchange. The ability to trade when the market falls past strikes offered on Nadex is really appealing to me. Let us look at a scenario. What if your strategy relied on a 4 standard deviation move for a certain period of time and you try to buy a strike over at the competition and there are no strikes available. Well this just sucks big ol’ feet with juicy sores! If I want to trade a strike, I love being able to do so on Cantor Exchange. Look at the picture below and tell me which exchange I could trade a 1.1235 strike. Yep. That’s right folks!
4. Cantor Exchange is backed by Cantor Fitzgerald
Cantor Exchange has a parent company named Cantor Fitzgerald. This company is one of the largest investment banks in the world with over 5,000 institutional accounts and offices all over the place. Why would they sink money into a project if they didn’t believe in the project? Hmmm. This is a huge reason Cantor Exchange is gaining momentum in awareness in the trading communities as well. There will be a day when someone says, ” Cantor Fitzgerald”, they will also associate Cantor Exchange with is as well.
5. Bucket shops are getting paranoid!
All the bucket shops (Overseas binary ‘brokers’) that have been getting away with theft for far too long are now getting to have a day of reckoning. They know they are being delt with and are getting scared. They should be scared. Their outright fraud will be limited. Not only am I spreading awareness about their fraudulent ‘bonus’ scams but I think the following picture pretty much says it all…
6. There are arbitrage opportunities with various markets
This is a little known way to trade and I will not even go into detail here because it will open up a can of worms and frankly I am not getting into it. All that being said, the traders who have been around long enough know exactly what I am talking about and some are profiting on it in the shadows. That is about all I will say about that.
7. Cantor Exchange has free API access and offers different trading platforms to match the needs of a varying array of traders.
There is no limit to the way you can connect with Cantor Exchange – Imagine being able to connect to their evil nemesis, Nadex, and trade on Nadex via your MT4 platform or an excellent charting platform from somewhere other than Nadex. This is not possible right now but this is exactly what Cantor Exchange is building. The ability to connect in unlimited ways. For instance, if I am trading forex, I can trade via my FXCM platform, via my MT4 platform, via my Think or Swim Platform, I can call the trading desk of my broker, etc… This is exactly what Cantor Exchange is building so get ready for a trading experience in binary options that is just gonna rock!
Just imagine this. What if you are sitting at home one day and thinking to yourself, ” Self, I want to place order on the exchange but I just don’t like the platform that offered. I think i will build my own.” So you call up the exchange and tell them that you would like to connect to their exchange on your own custom platform. This will not only be possible in the future. It is possible NOW!
Now a rebuttal:
They naysayer says, ” Cantor Exchange pricing is so horrible that I can’t even get a good price.”
I say this, ” The ONLY reason this happens sometimes is because there are not enough traders placing bid and offers on the exchange yet. This happens in EVERY trading venue when a new product is released and in time, those bids and offers come down to meet market demand.”
Here is a fact. 6 months ago, pricing was about at 67/64 spread which was in fact a 31 cent spread. Now, 6 months later, they are looking more like the picture below…
One reason I kind of laugh when people talk about their spreads being so wide is the fact that Nadex can have higher spreads than Cantor Exchange sometimes (Especially on 5 minute binaries and after hours). It does not depend on the exchange but rather what traders are offering. Cantor Exchange does not make the market. They do not create the prices you are seeing at all. Quite often Nadex trader who are looking at Cantor Exchange pricing will immediately tune it out because they do not understand the price structure.
Let me paint a picture for you to make the pricing seems a bit normal. Look at the picture below. This picture compares price on the left with Cantor Exchange and pricing on the right as if it were the same, exact pricing with Nadex. The only difference is in the way it is laid out.
Point Blank… Cantor Exchange is building momentum. Will they surpass Nadex in trading volume in the future? I don’t know but is it possible? Absolutely! Share this article and let’s all work together to spread awareness of this opportunity. Join the facebook group http://facebook.com/groups/cantorexchange and start talking!