Trading Nadex Spreads Into The News Monetary Policy Committee Purchase Facility Votes Official Bank Rate

Early in the morning at 4:30 AM, on Wednesday, November 19, 2014, the monetary stability in the United Kingdom will be examined and a report released. According to the Bank of England, “Monetary stability means stable prices and confidence in the currency. Stable prices are defined by the Government’s inflation target, which the Bank seeks to meet through the decisions taken by the Monetary Policy Committee (MPC).”

The reports will show the number of MPC members who voted for a rate cut, a rate hike or no change in the previous rate decision meeting. If it is a higher than expected number of members voting for a cut, that may signal a rate cut in the next meeting. That would be bearish for the GBP. If the number of MPC members who voted for a rate hike at the last meeting is higher than expected, that may be bullish for the GBP.

The ideal trade for this news event would be a straddle, entering as early as 11:00 PM, Tuesday, November 18, 2014. You will want to use the GBP/USD on Nadex Spreads for your instrument with a 7:00 AM expiration time. This will give your trade the time it needs to make its move. You are looking for a maximum risk of $40.

Remember on a straddle, you sell the lower spread and buy the upper spread. The floor of the upper spread must be equal to the ceiling of the lower spread.

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