By Darrell Martin
Two scheduled news events will be released this week on Thursday, July 7: Canadian Building Permits at 8:30 AM ET and Ivey School of Business Purchasing Manager’s Index at 10:00 AM ET. Both events have a history of getting the USD/CAD to react and pull back offering Iron Condor trade opportunities.
Canadian Building Permits
For this news event, trade two Nadex USD/CAD spreads. Buy the lower spread below the market and with the ceiling where the market is, and sell the upper spread above the market and with the floor where the market is. This trade can be entered as early as 8:00 AM ET for the two-hour 10:00 AM ET expiry spreads.
Profit potential for this trade is $30 or more combined, or around $15 or more each spread. Based on this profit potential, the breakeven points are where the market would hit 30 pips above and below. Stops should be set where the market would be at 60 pips above and below for a 1:1 risk reward ratio. When the market pulls back and is right between the spreads at settlement is max profit. Some profit is made when the market settles between the breakeven points. See below image for profit results based on where the market settles.
Ivey School of Business Purchasing Manager’s Index
Then at 10:00 AM ET, be ready to place another Iron Condor trade. With entry at 10:00 AM ET, go for Nadex USD/CAD spreads, the 12:00 PM ET expirations. Buy the lower spread below the market but with the ceiling where the market is trading, and sell the upper spread above the market but with the floor where the market is trading. Profit potential for this trade is $25 or more combined between the spreads.
Place stops where the market would move 50 pips up and down. Breakeven for this trade is where the market hits 25 pips up or down. When the market settles anywhere between the breakeven points, the trade will make some profit, with max profit being when the market settles between the two spreads
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