By Darrell Martin
The change in number of Building Permits for Canada was -9.8 percent last report March 8. It is forecast to come in at 2.3 percent this coming Thursday, April 7, 2016 at 8:30 AM ET. Since building permits are necessary to begin construction of new buildings, it is a telling indicator for building.
News like this can move the markets and build implied volatility into options. The Iron Condor strategy is great for collecting premium from implied volatility using Nadex spreads, which are designed for the day trader. This recommended strategy can be entered as early as 8:00 AM ET for 10:00 AM ET expirations. A spread has a floor and a ceiling designating the range of a market you can trade up or down. You cannot win or lose past the floor and ceiling of the spread depending on the direction you trade the spread.
To set up for this trade, buy a Nadex USD/CAD spread with the ceiling where the market is trading at the time, and sell a Nadex USD/CAD spread with the floor where the market is trading at the time. You want each spread to have a $15 or more profit potential for a combined profit potential of $30.
Buying Below The Market And Selling Above The Market At The Same Time
With this strategy, you are buying below the market and selling above the market. You want the market to stay in between those points to profit. Max profit is when the market is between the two spreads at expiration. Or, the market can make a move far enough for one spread to profit and then pull back and the other spread may profit. Therefore, be sure to place limit take profit orders once you’ve entered the trade. The nice thing about the Iron Condor is the amount of movement the market can make before hitting a 1:1 max risk/reward point where you would put your stops. For this trade, the market can move up or down 60 pips before you would want to exit to manage risk, depending of course on your exact entries.
Use the spread scanner to find the right spreads at a glance and enter instantly. The scanner can be accessed free at www.apexinvesting.com.
Nadex is a CFTC regulated US based exchange and can be traded from 48 different countries. For a full range of free education on how to trade Nadex binaries and spreads as well as futures, forex and CFDs, visit www.apexinvesting.com.
