Trade US Sales Numbers And Pricing Info On Friday

U.S. Retail Sales, the change in value of all retail sales, and Core Retail Sales, the Retail Sales number excluding automobiles, will be released for Friday at 8:30 a.m. EST. The Producer Price Index, which shows the change in prices of finished goods, and Core Producer Price Index, PPI excluding food and energy, will also be released at the same time. The EUR/USD tends to react to this news and has an average move of around 35 pips. This move presents an opportunity to use an Iron Condor strategy with Nadex spreads.

Day trader spreads, like the ones Nadex offers, provide opportunity for traders to trade short-term spread options with durations of two, five, or eight hours, as well as a daily from 6 a.m. ET to 3 PM ET.

A spread has a floor and a ceiling designating the price range that can be traded long or short, therefore capping the risk.

For an Iron Condor for this trade, one could buy a lower range spread with the ceiling where the market is trading at the time and sell an upper range spread with the floor where the market is trading at the time. Each spread should have a profit potential of $17 or more, for a combined profit potential of $35. The trade can be entered as early as 7:00 a.m. ET for the 9:00 a.m. ET expiration.

To find the right price for stop orders, simply double the profit potential. For this trade with the combined profit potential of $35, the stop should be at 70 pips above and below from where the market was at entry.

Maximum profit happens when the market is between both spreads at settlement. After the news is released, the market tends to move and then pull back. The closer it pulls back between the two spreads, the higher the profit. Breakeven points are 35 pips above and below, and when the market is anywhere between those two points at settlement, there is some profit.

More contracts can be traded, just be sure to have the same number of contracts on both sides of the Iron Condor. 

For free education on trading and free access to the Apex spread scanner, visit Apex Investing.