By Darrell Martin
The UK’s Office for National Statistics will release earnings and unemployment data Wednesday, April 20, 2016, at 4:30 AM ET. The following three data items will be released: Average Earning Index, Claimant Count Change and Unemployment Rate. The Average Earnings Index is a three-month moving average of the change in the price businesses and government pay for labor with bonuses. The Claimant Count Change reflected in the name, is the change in the number of people claiming unemployment benefits. The Unemployment Rate is the percentage of people unemployed looking for work in the last three-month period.
This news can get the markets moving making a Straddle strategy ideal, using Nadex spreads. Straddles are good to use when it’s anticipated the market could make a significant move and afterward, they may or may not pull back. Since spreads are used on both sides of the market, it is possible to profit regardless the direction the market moves, as long as it moves far enough. This trade setup has a 1:1 risk/reward ratio, for approximately $40 of profit, the risk is $40.
To set up your Straddle, sell a Nadex GBP/USD spread below the market with the ceiling where the market is trading at the time and buy a Nadex GBP/USD spread with the floor where the market is trading at the time. Both spreads should have no more than a risk of $20 for the combined risk of $40. A few dollars off isn’t a big deal but stay close to, if not exactly at a $40 risk maximum.
Find your spreads quickly and easily by opening the spread scanner available to all traders free at www.apexinvesting.com. To find spreads for this Straddle trade, open the GBP/USD market, and look for those with a max risk of $20 for selling and $20 for buying. The trade can be entered as early as 11:00 PM ET the night before for 7:00 AM ET expirations. Be sure the floor and ceiling meet the above parameters. Click the ticket icon and you are ready to go.
The beauty of the Straddle is the low risk and no need for stops. You do need to place limit take profit orders. Once the market has moved up or down 40 pips, your trade has hit breakeven. After that point, your trade is in profit. When the market hits 80 pips up or down, then your trade has made $40. Remember, based on this news and previous market reaction, the market tends to move this much.
Nadex is a CFTC US based regulated exchange and can be traded from 48 different countries. For free education on how to trade Nadex binaries and spreads as well as futures, forex and CFDs, go to www.apexinvesting.com.
