By Darrell Martin
Here is another opportunity for those of you that like to place an overnight trade into a news event. On Thursday, November 13, 2014, at 3:15 AM, the Swiss Federal Statistical Office will release the Producer Price Index or PPI. This is an index which measures the average changes in the price of goods sold by manufacturers. This is a leading indicator of consumer price inflation. This in turn accounts for the majority of the overall inflation in Switzerland.
If this reading is higher than anticipated, then that should be regarded as positive or bullish for the CHF. If it is lower than is expected, the opposite would be a negative or bearish outcome for the CHF side of your trade.
Since this news is released at 3:15 AM on Thursday morning, a good overnight strategy would be an Iron Condor or Butterfly. The Iron Condor would be the first choice and would be done using Nadex Spreads on the USD/CHF entering as early as 11:00 PM on Wednesday night, November 12, 2014. The expiration time you are looking for is 7:00 AM giving your trade time to move. Look for a minimum profit of $35 on this Iron Condor. Remember that an Iron Condor is a strategy where you enter two contracts on the same instrument; buying the lower spread and selling the upper spread. Make sure that the ceiling of the lower spread is equal to the floor of the upper spread.
If this Iron Condor isn’t found to meet these specifications, you can look for a Binary Butterfly. This time you will use Nadex Binary Options on the USD/CHF. The butterfly is similar to the condor wherein you buy the lower binary option and sell the upper binary.
The forecast for this event is -0.2%. Last month’s reading was -0.1%.
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