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By: Adam Stone
January 10th 2014 7:15pm GMT, London UK
 

Today, i guess you all know already, is the biggest trading day of the trader’s calendar. On each first Friday, the Non Farm Payrolls report is released. It is a very wide scope report meant to gauge the real employment situation in the US by measuring the number of newly added Americans to payrolls across the nation. Obviously, the bigger the number, the better the overall economic situation in the US. However, it’s important that the figure is released simultaneously with the unemployment rate. So things get very volatile in an extremely quick manner. In fact, the markets have been known to head higher and back lower in mere seconds by a factor of two hundred or even three hundred pips (for forex pairs). This price action potential is what actually made forex trading so popular.

However, in recents months, the reactions have been much more muted in scope. So binary options traders, albeit just as hard pressed to preordain the actual direction, are at least better able to cope with the actual move. Because binary options trading involves a predetermined risk level, unlike forex trading which can find you wiped out due to such strong moves and this regardless of preset stop losses, you are much better equipped at contending with this psuedo-tsunami.

Non Farm Payrolls with binary options

Today specifically, markets at 13:30 GMT will be expecting a release of the report with forecasts for a figure of 196k as compared to last month’s 203k. The unemployment rate is expected to have remained as is at an elevated 7.0%. We maintain that these figures are considered sub par for this stage of the US’s economic recovery. This is the reason that the Federal Reserve haven’t pulled the plug on economic stimulus and instead opted to taper the bond buy backs, effectively reducing the amount of money printing. This means that today’s figures may be even more scrutinized than is ordinarily expected in the markets. The Fed has maintained that the NFP needs to be 200k + and unemployment is still too high and as such the crutch that is quantitative easing still needs to be provided to keep the market afloat. While probably entirely true, it’s causing the USD to lose it’s ability to strengthen.

Binary options traders will note that the value of the USD has been able to keep its place, at least against the majors and specifically agains the EUR. Today, binary options traders are warned to keep very focused on the markets in the hours leading to the release and in the 10-30 minutes thereafter. Note too that liquidity will likely drop to near zero and then swell to a massive volatility spike. Both effects render trading the actual time of the news very difficult. But you can take options prior to the release for expiry after the release which makes things more manageable. Certainly easier and less stressful than any forex strategy you may be considering.

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Adam Stone
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Adam Stone

As COO of GOptions, my first and foremost goal is to provide traders with the most up to date info from the markets. I have been trading the markets since 2004 and have been involved with stocks, binary options, and forex trading since then. I have had no formal market education and pride myself on a self taught approach to everything related to trading. I try to focus though on both the technical and fundamental aspects related to each trading day and bring forward the most important aspects of risk/reward in the market.
Adam Stone
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