Market Overview

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.

If you would like to learn how to use other strategies when trading the news, go to Apex Investing Institute offers free education, and free access to the Nadex Binary and Spread Scanner Analyzers. Member traders are invited to trade in the chat rooms, take advantage of trade signal services, have key indicators and access the Apex Forum. The forum content is updated daily and includes over 9000 members. In a supportive learning community of seasoned as well as up and coming traders, traders of all levels learn how to trade Nadex binaries and spreads in depth, as well as futures, forex, stock and options, and gain an edge for successful trading overall.

The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

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