By Darrell Marti On Thursday, January 18, at 8:30 A.M., the Census Bureau, Department of Commerce, Department of Labor, and the Federal Reserve Bank of Philadelphia, US, will release thirteen reports. These might impact trading and vary from low to high in importance. The reports cover topics such as housing starts, jobless claims, building permits and the Philadelphia federal index. Such reports measure changes happening in the economy of the United States. There are various ways reports of this kind may affect the market while also offering a trade setup.
In the market, news reports are known to cause volatile movements. Reactions to this kind of news is generally followed by a pullback after the movement. However, the direction of this movement is unknown.
One advantageous strategy the trader might use is the Iron Condor, which uses two Nadex GBP/USD spreads. The first spread is bought below the market at the same time the second is sold above the market. Thus, premium can be collected regardless of how the market moves. At the time of entry, the ceiling of the bought spread should meet the floor of the sold spread while being where the market is trading.
Collecting Trade Premiums
With the Iron Condor strategy, both trades profit relative to the center when the market goes up or down once the pullback occurs. As the time expires, both spreads can profit. This results in a collection of premium. Risk can be maintained to keep a realistic 1:1 potential, and there is no risk beyond the floor and ceiling of spreads.
This trade can be entered as early as 8:00 A.M. on Thursday, January 18 for a minimum profit of $35. The 10:00 A.M. expiring spreads will be available the morning of the reports are released, providing a quick opportunity to trade. This is a great trade to familiarize yourself further with the market reactions demonstrated between news events and Nadex spreads.
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