Trade Idea: Canadian Purchasing Managers Index
The Richard Ivey School of Business surveys purchasing managers across Canada monthly and produces a level of diffusion index indicating whether industry there is expanding or contracting. Purchasing managers are asked a variety of questions pertaining to business conditions including everything from employment, inventories, new orders, pricing and more. The result of this survey is the Ivey Purchasing Managers Index and the next release is Wednesday, April 6, 2016, at 10:00 AM ET.
Traders watch this leading economic indicator because purchasing managers have a great insight into the most current views of businesses. Therefore, this news event can be good for trading using Nadex spreads and an Iron Condor strategy.
To set that up, one can buy a USD/CAD Nadex spread with the ceiling where the market is trading at the time, and sell a Nadex USD/CAD spread where the floor is trading at the time. Each spread should have a profit potential of $12.50 or more for a combined profit potential of $25.
Bbased on 12 - 24 previous months of market reaction to the released reports, the trade can be entered as early as 10:00 AM ET for 12:00 PM ET expirations.
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