US Preliminary GDP and Gross Domestic Product News Release Friday Make For Possibility Of Trade

Friday at 8:30 AM EST, the US Preliminary GDP and US Preliminary GDP Price Index news will be released. These reports are released quarterly although they are in an annualized format. The Prelim GDP measures the annualized change in the value of all goods and services produced by the economy while the Price Index measures the annualized change in the price of all goods and services included in the GDP. You can take advantage of this news release by trading Nadex spreads using an Iron Condor strategy on the EUR/USD. These reports are also known as Gross Domestic Product (GDP). There are three reports of the GDP released a month apart and this one is the preliminary. The advance is the earliest released and usually has the most impact. The second is known as the preliminary which is followed by the final release a month later.

Trade Opportunity for the EUR/USD

Scheduled news events like this are great opportunities for researching consistent reactions and moves in the market and then trading the events going forward. Apex Investing does this on a regular basis on many news events and keeps an ongoing calendar with recommended trading strategies. For this news event the analyzed data found that a neutral Iron Condor strategy worked well trading the EUR/USD.

Iron Condor Strategy for $25

The research showed the market to move an average of 25 ticks up or down after the release of the reports and then return. The Iron Condor is a neutral trade strategy meaning the set up is good for a market making a move but not necessarily continuing in the direction but pulling back and returning. It's recommended to enter as early as 7:00 AM EST for a 9:00 AM EST expiration. To set up your trade you would buy a lower EUR/USD spread and sell the upper spread. The ceiling of your lower spread and floor of your upper spread should meet and be where the current underlying market is trading. You want to build your Iron Condor to have a profit potential of about $25 or more. An example would be buying the lower spread about $12 below the underlying market and selling the upper spread about $13 above the underlying market. That would give you a max profit potential of about $25. Remember you can have more profit potential than that if possible and you can trade more than one contract.

Before a news event there can be implied volatility in the pricing and that is what you are looking for here. If there is enough implied volatility in the pricing, you will be able to set your trade up with a profit potential of $25 or more, if not then do not place the trade. It is recommended to hold your spreads until expiration. The closer to the center, right between your spreads the market comes back and settles at expiration, the greater your profit. Max profit would be if the market was right in the middle of the spreads at the ceiling of your lower spread and floor of your top spread. For a complete calendar of news events and strategies to trade them, you can visit www.apexinvesting.com.

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