A Way To Trade The Statistics Canada Employment Report
On Friday morning, April 10, at 8:30 AM ET, Statistics Canada will release its report which shows the change in employed people for Canada as well as the percentage of unemployed people looking for work during the last month. Employment, job creation and the jobless rate are leading indicators for consumer spending which greatly affects the economy.
These scheduled news events can be traded using Nadex spreads. Nadex, which stands for North American Derivatives Exchange, is a regulated exchange to trade binary and spread contracts, derivatives of underlying markets. Nadex can be traded from 49 countries. Potential ideas to trade are USD/CAD spreads.
Enter At 8:00 AM ET For A 10:00 AM Expiration
One potential trade can be entered at 8:00 AM ET, with a 10:00 AM ET expiration.
It was found by Apex Investing through 24 months of researching the market's reaction to this news release, that the market typically moves an average number of pips and then pulls back. This is exactly the desired market reaction for the Iron Condor strategy.
The closer the market returns to center between the two spreads the higher the profit potential with the greatest profit being exactly in the middle at expiration.
Market Can Move Approximately 70 Pips Up Or Down For 1:1 Ratio
For example, if the lower spread is bought for $20 and the upper spread is sold for $15, and the market either stays in the middle of the two spreads until expiration, or moves and returns then max profit is made. If the market moves up $20 and remains there until expiration, traders profit $20 on the lower spread and lose $5 on the upper spread for a total net profit of $15.
If the market moves up 35 pips, traders' net profit is $5. For a 1:1 max risk/reward ratio, the market could move up or down approximately 70 pips.
© 2016 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.