By Darrell Martin
Scheduled news events can be great to trade. They’re scheduled so you know when they are coming out, and when they instigate consistent market moves, then strategies can be planned for the next report date. That is the case here. In Great Britain the Bank Of England will be releasing the following three reports at the same time:
Net Lending to Individuals
M4 Money Supply
Mortgage Approvals
Net Lending to Individuals measures the new credit issued in the previous month to consumers. Also released monthly is the M4 Money Supply, which is the change in total currency in circulation and deposited in banks. Then last but not least important, is the Mortgage Approvals or the number of new mortgages approved for home purchases in the previous month.
News Scheduled Middle Of The Night, Enter Trade Night Before And Go To Bed
All the reports are released at 4:30 AM ET Monday, June 29, 2015, basically in the middle of the night for the US. Fortunately, this trade is a trade you can put on the night before at 11:00 PM ET Sunday, June 28. You can put the trade on and go to bed, let it play out until expiration, then wake up and check your trade. The suggested strategy for this trade is the Iron Condor a low risk neutral trade strategy using Nadex Spreads. The reports come out in the middle of the night in the US, however; Nadex can be traded in different time zones as well, since it can be traded from 49 different countries. For the purpose of this trade though we will stick to Eastern Time.
Nadex GBP/USD Spreads For This Iron Condor
Using Nadex GBP/USD Spreads, the market you want to refer to on a chart is the GBP/USD. That is the underlying market. Nadex Spreads are derivatives of underlying markets. To set up your Iron Condor buy the lower GBP/USD Nadex Spread and sell the upper GBP/USD Nadex Spread. The ceiling of the lower bought spread should meet the floor of the upper sold spread and should be where the then current underlying market is trading. The recommended profit potential for this trade is $35, therefore, buy the lower for around $15 - $20 or more and sell the upper for around $15 - $20 as well, so the two together make $35 or more. The market can move up to 70 pips in either direction and maintain at that level and still be a 1:1 risk reward ratio.
Based on analysis over 12-24 months of released reports, and the market’s reaction, it was found this strategy and this profit potential had the highest probability or opportunity for profit. For this report it was found that the market usually pulls back after its initial move. The closer it pulls back to the price where the ceiling of your lower and the floor of your upper spreads are the higher your profit potential. The news department at Apex Investing tracks market reactions to various news reports to look for high probability trade opportunities. To see a full calendar of their suggested strategies for news trades you can go to www.apexinvesting.com. For an educational read on an Iron Condor trade see The Awesomeness Of An Iron Condor by Darrell Martin.