Finish February With Overnight Trade


By Darrell Martin

Enter an overnight trade on Wednesday, February 28, as early as 11:00 PM EST to finish February. On March 1, at 4:30 AM, EST, Markit in the United Kingdom will release the Manufacturing Purchasing managers’ Index (PMI). This report measures the activity level of purchasing managers in the manufacturing sector. Knowing that purchasing managers usually have early access to data about their company’s performance, traders watch this report closely. It can be a leading indicator of economic performance.

Because a large movement is expected but direction is unknown, a straddle strategy implementing two Nadex GBP/USD spread contracts could be used. A straddle is set up by simultaneously buying an upper contract above the market and selling a lower contract below the market. Make certain the floor of the upper bought contract meets the ceiling of the lower sold contract.

This is usually a low risk trade with the amount risked being thought of as insurance. Profit is made off the actual tick movement. A potential profit of say $40 would allow a risk of $20 on each spread. When using the straddle strategy, allow the expected move to be at least 150 percent of money risked.

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