Nadex

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HedgeStreet
Private
Industry Finance
Founded 2004[1]
Founder John Nafeh, Ph.D.[2]
Headquarters Chicago, Illinois, United States
Area served
United States
Key people
Timothy McDermott
Products Binary Options & Spreads
Services futures/derivatives exchange
Owner IG Group
Number of employees
50[2]
Website http://www.nadex.com

Nadex, originally known as “HedgeStreet” and based in San Mateo, California, was launched in 2004 offering an electronic marketplace for online retail investors to trade financial derivatives. After more than three years in operation, HedgeStreet shut down its business in late 2007. Shortly thereafter, UK-based IG Group Holdings plc. agreed to purchase HedgeStreet, Inc. for $6 million and began restructuring the exchange, its technology, and its products. In 2009 HedgeStreet was renamed as the North American Derivatives Exchange (Nadex).

History[edit]

Nadex, originally known as “HedgeStreet” and based in San Mateo, California, was launched in 2004 offering an electronic marketplace that allowed online retail investors to trade financial derivatives. After more than three years in operation, HedgeStreet shut down its business in late 2007. Shortly thereafter, UK-based IG Group Holdings plc. agreed to purchase HedgeStreet, Inc. for $6 million and began restructuring the exchange, its technology, and its products. In 2009 HedgeStreet was renamed as the North American Derivatives Exchange (Nadex).

HedgeStreet was the first Internet-based government regulated (CFTC) event futures/derivatives exchange.[2] The company operates the HedgeStreet Exchange, which launched in October 2004 and provides traders with a place where they can hedge against or speculate on economic events and price movements.[1] The reasoning behind the creation of HedgeStreet was that with the rise of individual private investment in stocks, there might be a similar appetite for individuals to invest in derivatives.[3] This focus on small investors created sufficient confusion that John Nafeh, founder of HedgeStreet, created the term "hedgelet" to help explain the company's business model.[2]

| In 2007, UK based IG Group announced intent to acquire HedgeStreet[4][5] and later in the year completed the purchase of the company.

Soon after the acquisition, IG Group renamed HedgeStreet to the North American Derivatives Exchange (Nadex).

See also[edit]

References[edit]

  1. ^ a b Steven Smith (2004-11-25). "Hedging for Small Investors". TSCOptions column (TheStreet.com). Retrieved 2007-12-26. The site, which launched in early October .... operates as both an exchange and clearinghouse, is a licensed operator, in this case by the Commodity Futures Trading Commission. 
  2. ^ a b c d Laura Counts (2006-05-26). "HedgeStreet has opened up derivatives trade to Main Street". Print Edition (Silicon Valley / San Jose Business Journal). Retrieved 2007-12-26. I'd spend the first half of every conversation saying 'no,'" said Mr. Nafeh, chairman of the San Mateo company. "I had to come up with the term 'hedgelet,' so I could explain what it was, instead of what it wasn't. 
  3. ^ Daniel Nasaw; Ian McDonald (2004-10-22). "Firm Offers Hedging on a Small Scale" (PREVIEW). WSJ.com (The Wall Street Journal). Retrieved 2007-12-26. Now a new online market wants to bring derivatives to the masses, albeit in small doses and not in the speculative form that critics contend can pose financial ruin. 
  4. ^ Regulatory News Service (2007-11-19). "IG Group Hldgs plc - Acquisition". Hemscott.com (Ipreo). Retrieved 2007-12-26. IG Group Holdings plc ('IG' or 'the Group') agreed on Friday 16th November to purchase the entire issued share capital of HedgeStreet Inc ('HedgeStreet') for $6.0m, approximately £2.9m. 
  5. ^ Regulatory News Service (2007-12-07). "IG Group Hldgs plc - Acquisition Update". Hemscott.com (Ipreo). Retrieved 2007-12-26.