Existing Home Sales News, Sweet Or Not, Can Be Traded
Home sweet home. Everyone needs one. The U.S. Existing Home Sales news, which shows the annualized number of residential buildings sold the previous month, will come out Wednesday. This news can be traded with a neutral strategy setup for collecting premium, using an Iron Condor made up of two Nadex EUR/USD spreads.
Since the news comes out at 10:00 AM ET, entry can be at 9:00 AM ET for 11:00 AM ET expirations. The profit potential should be $30 or more combined between the two spreads. One spread could be bought below the market, but with the ceiling where the market is trading at the time. The other spread could be sold above the market, but with the floor where the market is trading at the time.
Based on a $30 profit potential, that many pips up and down from where the market is at entry will be the breakeven points. Double that, and 60 pips up and down is where to place stop limit orders for a 1:1 risk reward ratio.
This news usually causes a reaction in the market with a move and then a pull back. When the market pulls back close to where it started, between the two spreads, that’s where profit can be made. Premium is collected as time expires getting closer to expiration.
Be aware that this week is when the UK will be voting on the referendum to either stay or leave the European Union. The polls have showed the vote is close, and results either way will cause major impact in the markets. An article is available for information on the Brexit.
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