The upcoming week will feature the release of important Q3 GDP data for several countries, including India, Canada, Brazil, Australia and Switzerland. Other important information includes monetary policy updates from the European Central Bank, the Bank of Canada, the RBA and the Bank of India. I have found that by tracking the consensus forecasts and measuring them against the actual figures, you can profit off the differences with binary options trading. These trading opportunities present themselves in the form of call or put options in currency pairs, indices, stocks and commodities. For the week ahead, these are my predictions vis-a-vis profitable trading opportunities.

1 – Currencies: Consider Call Options on AUD/USD Pair 

AUD/USD Pair is Bearish but Forward Guidance may warrant Call Options on the AUD

The Australian dollar has come under increasing pressure of late as a result of China weakness. Leading into the final days of November, the AUD weakened substantially against the greenback. This has been the result of stresses on the commodity sector of the Australian economy, notably the mining sector. Persistent weakness in China has given rise to a significant decline in exports from Australia to China. This has impacted on the revenue streams and profitability of multinational corporations operating in Australia, and the AUD as well.

On Monday, 30 November 2015, the Reserve Bank of Australia will be making a decision regarding interest rates. The consensus forecast is 2%, and the previous forecast was 2%. In other words no changes are expected in interest rates, but it is the content of the statement released by the RBA that will be closely watched by currency traders. If forward guidance indicates that an interest-rate hike will be forthcoming, the AUD will rally and call options will be the order of the day. This is likely to happen irrespective of no changes being made to the current interest-rate. In much the same way as currency traders attempt to interpret the statements of the Fed FOMC for indications of future activity, so too will traders attempt to gain invaluable information regarding the future direction of the RBA.

Trading Suggestion: The RBA is expected to leave interest rates unchanged; however the forward guidance is what you should be looking for. Any indication that an interest-rate hike is forthcoming will warrant the placement of call options on the AUD/USD currency pair.

2 – S&P/ASX200 Sydney could be boosted if Q3 GDP Actually meets Consensus Forecasts

The S&P/ASX 200 Sydney Index has been trading relatively flat of late, owing to China weakness and the commodity price slump. This has directly impacted the performance of the index, as is evident from November declines. However on Tuesday, 1 December 2015, the GDP growth rate year-on-year for Q3 will be announced. The consensus forecast is 2.3%. The GDP growth rate quarter on quarter for Q3 will also be announced on Tuesday, 1 December and the consensus forecast is 0.7%. My advice to traders is to watch carefully for actual figures, since any uptick in actual performance for Q3 (year-on-year or quarter-on-quarter) will have a positive effect on this index.

Trading Suggestion: Australian GDP has grown every quarter of 2015 year-on-year. While the growth rates have been declining since they peaked at 2.9% in Q1 2014, the consensus forecasts have typically reflected mixed performance. As cases in point, on June 3, 2015 the consensus estimate was 2.1% and the actual figure was 2.3%. On September 2 the consensus estimate was 2.2%, but the actual figure came in at 2%. Now, the consensus figure is 2.3% for GDP annual growth. Should the actual figure match or exceed the consensus, an uptick in sentiment will ensue. However, I remain confident that the GDP figures will meet expectations.

3 – Commodities: Consider Put Options on Gold (GLD)

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The world’s most precious metal gold is facing increasing pressure amid Fed rate hike plans and a strong USD. It is common knowledge that a strong dollar is not necessarily a good omen for the gold price, especially when interest-rate hikes are being introduced to bolster dollar strength. Since gold is not an interest-bearing asset, little stands to be gained by ploughing money into gold when investors can place their money elsewhere. The USD bounced recently, and with interest-rate hikes around the corner (78% likelihood), the price of gold hit a 6-year low. Gold bullion is now trading close to $1,070 per ounce – bordering the $1,064.95, 6-year low figure. The gold price recently dropped after it was revealed that manufacturing output increased well beyond expectations in October. This is important because it indicates that a rate hike is more likely because the US economy is performing so strongly. Gold may have enjoyed a slight uptick with the Turkey/Russia crisis, but that looks likely to be resolved soon. For now, you can bank on uncertainty relates to the Fed driving prices lower.

4 – Stocks: Consider Put Options on Goldcorp Inc. (GG)

It would be foolhardy to give advice on a commodity like gold without backing it up with equivalent sentiment on the goldmining companies themselves. In this vein, I am of the opinion that put options on Goldcorp Inc are a safe bet moving towards December 15/16 when the Fed FOMC meeting takes place. In the run-up to the decision, we can expect traders to shy away from gold stocks, while investors may adopt a long-term approach to the precious metal. The 1-year return for the stock is -29.08%, with a year-to-date return of -27.99%. I’m confident that put options on the stock are a safe bet as we approach mid-December.