Market Overview

Trading The WASDE Crop Report With Strangles


On Thursday, April 9, 2015, at 12:00 noon ET, the WASDE report will be released. WASDE stands for the World Agricultural Supply and Demand Estimates Report. This report can cause massive moves in the Agricultural Markets, especially corn and soybeans.

Expected massive market moves call for non-directional trading strategies such as straddles or strangles. If the Implied Volatility is high enough, an Iron Condor might be another strategy choice.

Straddle Or Strangle?

Although the terms sound similar and are both used in non-directional trading, they are not synonymous. Straddles are done on spreads and Strangles are placed on binaries.

Both involve two contracts placed on the same instrument expiring at the same time.

To place a Binary Strangle trade, traders would sell the lower OTM (Out of The Money) contract and buy the upper OTM contract. It is the opposite of a Butterfly strategy.

How To Trade

For traders interested in using a straddle on Nadex Spreads or a strangle on Nadex Binary Options, maximum risk on these strategies should never exceed $25 per side, with $15-20 being ideal.

Those who trade before the news is released typically get the best OTM strike prices.

Posted-In: apexinvesting binary binary charts binary optionsBinary Options Education Markets General


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