By Darrell Martin
Preliminary numbers for US Gross Domestic Product will be released Friday, August 26, at 8:30 AM ET. This report is released quarterly and is based on the annualized change in the value of all goods and services produced by the economy. It comes out about sixty days after the quarter ends. The Preliminary GDP is the second release of the numbers after Advance and before Final. Advance has the greatest impact however; Preliminary still has enough impact on the markets for a trade opportunity.
Using Nadex EUR/USD spreads, an Iron Condor strategy can be traded for a minimum profit potential of $30. To set up the strategy for this news event, buy a spread below the market with the ceiling where the market is trading at the time and sell a spread above the market where the floor is trading at the time. Looking in the reward columns on the Apex spread scanner for trading Nadex, find the EUR/USD 8:00 AM ET spreads expiring at 10:00 AM ET with $15 or more reward potential. This is easy to do using the filters and glancing at the risk/reward columns. See below for the layout of the Apex spread scanner.
Once you have found the right spreads, verify all the parameters and enter the order. Stops do need to be placed when trading an Iron Condor. The strategy is meant to make the most profit when the market makes a move and then pulls back to center between the two spreads at settlement. As long as the market is between the breakeven points, some profit will be made. For this trade setup, the breakeven points would be 30 pips above and below.
The stops would be placed 60 pips above and below. The market would hit the 1:1 risk/reward ratio at those points. Stops are there in the event the market makes a strong move and doesn’t pull back. The risk is kept reasonable to a 1:1 risk/reward ratio. There is always capped risk as well with Nadex spreads unlike trading futures and Forex.
For free day trading education and access to the spread scanner visit Apex Investing.