Can This Work??

#1

I know it’s probably a dumb question and if it actually worked, we’d all be millionaires.lol But I wanted to know since the NFP day has huge movements, could I possibly buy and sell deep out of the money strikes in hopes of getting that “Jackpot” win? I just don’t see why is wouldn’t work since there is almost always at least a 100 point move. What if I bought a strike at 25 and then an opposite strike at 75. Kinda like an iron condor. Wouldn’t that be the best thing to do? I would do like 10 contracts to make a huge profit.

#2

If you had a system down I’m sure you could trade anything, but correct me if I’m wrong but it sounds like you would put the trade on without any kind of system and just hope that it will move in your favor, which is pretty much gambling.

#3

It is called a strangle. The problem is two parts.

The first is you have to get the strikes at the correct distance from the current price. Since these will be played on the two hour binary they tighten the spread from one binary to the next. You will not get a $25 strike. Most of the time it will be over thirty and something like 50 pips from the current price.

The second problem is you are hoping that the market will make a big move. Sometimes it will and other times it does not. You can lose both if it closes between the two strikes.

Try it on demo at the next NFP. Look at the binaries and notice the pricing. According to the rules you should not pay over $50 total for the two binaries. Look under the news trading plan for more info.

#4

Just because it moves big does not mean it wont bounce right back down So you have to take profit. If you do and you risk $50 or more total how much will you actually make by the time you take profit? Very little.

The large movement is no more of a surprise to us as it is to the market. So the market will price in (implied volatility) expected move into the binaries - which in essence pushes the price closer to the center ($50) when large moves are expected. More often than not its so overinflated i actually look for the opposite of what your saying and do a range bound strategy as the premium is so high. Though I am more likely to do this with spreads than binaries for a multitude of reasons I cover in the training. But for the right price a straddle or strangle is a viable option. Check out the news plan we lay a lot out for you. Dont just assume the strangle is a good choice the market is smart and knows how to price the options accordingly.

#5

I’m thinking maybe a fade after the market settles is the best move. Can we assume the high or low has already been established by 10am EST? I was going to wait until after noon, but I just put in some fade orders to sell EUR/USD & GBP/USD just a couple minutes after 10am. I sold both for $30 just above the high spike from the NFP. This is in DEMO, of course! I still have to do some research on the “after move” from previous NFP reports. I may have entered a little too soon. I’m thinking sometimes it slowly creeps back to the spike & possibly passes it before 12-1pm. I’m going to do some major study on this in the next few days.

I actually got a GREAT deal for the $30 strike on GBP/USD! The market was about 15 pips from the strike. For the EUR/USD, I had to put in a working order & it had to get a bit closer to trade at that price, like less than 10 pips.