Keep An Eye On Home Loan Stats This Week

Change in the number of new loans is one way of measuring demand in the housing market. Australian Bureau of Statistics releases the Home Loans percentage increase or decrease results 7:30 PM ET, Thursday, January 14, 2016.

This news can create implied volatility, which creates premium in the price of options. However, since it’s news, there is no way of knowing ahead of time which way the market will go. Therefore, a neutral strategy using options can work well.

The Iron Condor is a neutral strategy to use with Nadex spread options. 

A spread allows the traders to trade a range of the market and has a floor and a ceiling to mark that range. Past the floor or the ceiling, there is no winning or losing and you can trade the spread long or short. 

For this trade, buying a spread with a floor below the market but with the ceiling at market where it is trading at the time is one strategy. You would also sell a spread with a ceiling above the market but with the floor at market where it is trading at the time. In this way, the ceiling of the bought spread meets the floor of the sold spread, where the market is trading when you enter.