What 65% Of The Mortgage Lending Market In The UK Is Reporting


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By Darrell Martin

British Banker’s Association releases the number of new mortgages approved for home purchase for the previous month by BBA represented banks in Great Britain. This report, analyzed by Apex Investing, was found to move the GBP/USD an average of 30 pips. News events scheduled which cause consistent reactions in the markets make for great trading opportunities.

A Premium Collection Strategy Trade

The BBA represents the banks that make up approximately 65% of total UK mortgage lending. This measures the demand of the housing market. This report comes out early Wednesday morning at 5:30 AM ET. To trade it, however, you can set your trade up the night before, Tuesday, at 11:00 PM and leave it on until expiration Wednesday at 7:00 AM. This kind of trade is an expiration premium collection, meaning as time expires the trade is profiting by collecting premium, similar to how insurance companies make money. They collect premium, time expires with no accidents and they profit.

Profit Potential Of $30 Or More

In this case, the trade strategy is an Iron Condor using two Nadex Spreads looking for a profit potential of $30 or more. The Iron Condor is a neutral strategy that makes max profit when the market returns to where it started, that being in the middle of the two spreads that make it up. There is a bought lower spread that has a ceiling, and when buying this spread the ceiling should be where the current underlying GBP/USD is trading. The second spread is a sold upper spread with the floor being where the current underlying GBP/USD is trading. If you can’t find spreads that have a $30 or more profit potential, then there is no trade. For a higher profit potential, there is the possibility of adding more spreads to each side, keeping them even in number.

After the report is released at 5:30 AM ET, the market should react, move and return. Should it return to exactly between the spreads then max profit is made. In fact, if the market didn’t react at all and remained where it was, just letting time expire, then it would make max profit at expiration. To learn more about the Iron Condor strategy, Nadex spreads and how to trade news reports, you can go to www.apexinvesting.com.