News On Home Sales Sparks Trade Opportunity

Wednesday, December 30, 2015, just before the New Year begins, the last Pending Home Sales report for the 2015 year will be reported. This news event can be traded using an Iron Condor strategy. The National Association of Realtors announces this report, which measures the change in the number of homes under contract to be sold but still waiting for closing. This report excludes new construction. Released Tuesday, the Standard & Poor's Case-Shiller House Price Index, which tells of the change in the selling price of single-family homes in 20 metro areas, came in again at 5.5 percent, the same as November. Pending Home Sales is forecast to come in at 0.6 percent over the 0.2 percent from November.

Based on market reaction to Pending Home Sales past reports, it is recommended to do an Iron Condor strategy using Nadex EUR/USD spreads. The report is released at 10:00 AM ET so you can enter the trade at 9:00 AM ET for 11:00 AM ET expiration. To set up this strategy, buy a spread and sell a spread on either side of the market. A spread allows you to trade a range of the market with the floor being the bottom of the range and the ceiling being the top of the range. Buy a spread below the market with the ceiling of the spread where the market is trading at the time. Sell a spread above the market with the floor being where the market is trading at the time.

To find the spreads you need for your trade go to www.apexinvesting.com and open the spread scanner. You will also need a demo or live account with Nadex, which can be set up quickly and easily and you only need $100 to open the live account. You can enter and exit your trades at any time as long as there is a bid/offer on the other side of your trade.

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EUR/USD

For this trade you will need to have a $25 or more profit potential. To achieve this just find the spreads with the right ceiling and floor, then check to see they have a combined Reward potential of $25. The Risk/Reward potential can be seen in the spread scanner to the far left if you are selling the spread and to the far right if you are buying the spread. Once both spreads meet your parameters, you can enter the trade. Be sure to enter both sides at the same time.

Since you are essentially buying below the market and selling above the market, the breakeven points for the trade are the points where you bought and sold. You want the market to settle anywhere between those points to make profit. Max profit is when the market returns to the center between your spreads at expiration. The place to put your stops or exit both sides is where the market has moved 50 pips up or down from where it started when you placed your trade.

Nadex is a CFTC regulated exchange based in the US and can be traded from 48 different countries. To access the spread scanner and learn more about trading Nadex spreads and news events go to www.apexinvesting.com.