By Darrell Martin
A trade opportunity for evening traders is set for Wednesday night, June 14, to enter as early as 11:00 PM ET for 7:00 AM ET expiration. This is in anticipation of Swiss financial news for release starting at 3:15 AM ET, early Thursday morning. Several reports are due out starting with the Producer Price Index. The Libor Rate, Monetary Policy Assessment and Press Conference follow this at 3:30 AM ET from the Swiss National Bank. Trading Nadex USD/CHF spreads, traders can take advantage of the trade opportunity with capped risk.
Nadex spreads allow traders to trade, long or short, a range of the market noted by the floor and ceiling of the spread. Profit and loss are capped at those points but the trade is not stopped out if the market passes through them. This allows for great strategies and flexibility while trading.
For this news event, an Iron Condor, trading two spreads, is an ideal setup based on previous market reaction to this news. Frequently, with scheduled financial or economic news, markets tend to react and make a move, and then pull back. The Iron Condor can take advantage of the pull back and profit on that move.
One Nadex USD/CHF spread is bought below the market with around $17 or more profit potential. Another Nadex USD/CHF spread is sold above the market, also with around $17 or more profit potential. The ceiling of the bought spread should be where the floor of the sold spread is and where the market is trading at the time of entry.
Once the news is released, and should the market make its move, when it pulls back, the closer it pulls back to between the two spreads, the greater the profit. However, if the market reacts and makes a very big move, then stops need to be in place to keep risk to a realistic 1:1 risk reward ratio and further managed. For this trade, those points are around 70 pips above and below from where the market was at entry depending on exact entries. If the market settles anywhere in between the breakeven points of 35 pips above and below from where the market was at entry, then profit is made.
Free access to the spread scanner, for beginner and advanced traders to trade spreads at a glance with accurate, fast execution, is available along with free day trading education at www.apexinvesting.com.