Market Overview

Trade Swiss News Overnight

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Early Thursday morning at 3:15 AM ET, the Federal Statistical Office in Switzerland will release the Producer Price Index (PPI) reports for Month over Month and Year over Year developments.

As a primary indication of consumer price inflation, the PPI measures average changes in the price of goods sold by manufacturers. If there is a rise in PPI, it often leads to a rise in Consumer Price Index (CPI), which in turn may cause interest rates and currency to rise. If this happens in a recession, profitability is lowered. This is because producers are unable to pass on the rising costs of materials to the consumer. As a result, the recession deepens and, over time, there is a fall in local currency.

Year over year (YoY) and month over month (MoM) are methods to evaluate results when matched with a comparable time frame, whether yearly or monthly.

The YoY report is forecast to remain at its current level while the MoM report is forecast to decrease. However, if a reading is higher than expected, it can be taken as positive or bullish for the CHF whereas if it is lower than expected, it is taken as negative or bearish for the CHF.

Trading Nadex USD/CHF spreads, the Iron Condor strategy with proper parameters cab give an overnight trading opportunity. A trader can enter Wednesday night, as early as 11:00 PM ET, with a 7:00 AM ET expiration.

To use this trading setup, a trader buys one spread below the market while at the same time selling another spread above the market. The ceiling of the bought spread connects to the floor of the sold spread and is where the market trades at the time of entry.

The iron condor strategy makes money when the market ranges or has movement and then pulls back. However, the range in which the market can settle and the trade can profit is reasonably large. The most profit is made when the market settles exactly between these two spreads.

Use the scanner to ensure each parameter is met before placing the trade. If not, do not force a trade. An example is below from the scanner and shows an Iron Condor.

 

Note the floor and the ceiling levels are equal at 2490. According to this image, current market levels were close to these levels at 2485.917. This is verified by noting the indicated line on the graph and/or looking at the Indicative Index price. The possible profit outcomes are available in the risk/reward columns.

Free access to this spread scanner for all traders and free day trading education is available at www.apexinvesting.com.

The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

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