Eleven GBP Reports Set For Release Early Friday

At 4:30 AM ET, Friday, September 29, the UK's Office for National Statistics along with the Bank of England will release a total of 11 reports that may impact trading. The reports include data on Gross Domestic Product (GDP), Mortgage Approvals, Current Accounts, Business Investment and Net Lending to Individuals. In various ways, these reports gauge the changes happening to the economy in the United Kingdom. Because of this, the reports can affect the market and offer a trade setup.

News reports generally cause volatility and movement in the market. The reaction to this type of news is usually movement in the market followed by a pullback. However, the direction of the movement is unknown.

In this situation, it could be advantageous for a trader to set up a trade to collect a premium and potentially profit regardless of which direction the market moves. A common approach to trading this type of news is an Iron Condor strategy that utilizes two Nadex GBP/USD spreads. One spread is bought below the market while another spread is simultaneously sold above the market. The ceiling of the bought spread should meet the floor of the sold spread and be where the market is trading at the time of entry.

A Premium Collection Trade

With this setup, the market can go either up or down and, if it pulls back close to the center between the spreads and time expires, both spreads can profit. This is a collection of premium.

The following image further clarifies how each spread profits or loses, depending on where the market is at settlement.

Risk can also be further managed to keep it to a realistic 1:1 risk/reward potential.

With such an early release time, this type of trade can be entered as soon as the 7:00 AM ET expiring spreads are available to trade, which is at 11:30 PM ET, Thursday, the night before the release. This is a great trade to demo and get familiar with market reaction to news events and Nadex spreads.

Free Day trading education is offered at Apex Investing Institute.