US Durable Goods Reports Expected To Present A Premium Collection Trade

On Friday, January 26, at 8:30 A.M. ET, the U.S. Department of Commerce, the Census Bureau and the US Department of Commerce will release seven reports. Ranging in importance from low to high, they cover topics such as Durable Goods Orders, GDP and Real Consumer Spending. These reports monitor changes in the United States economy. Because of this, a trading opportunity can occur as these statistics are announced.

Because of the reports' relative importance, the market may be subject to volatile changes on the day of their release. However, such movements are often followed by a pullback. The direction of this movement remains unknown.

Some traders might use a strategy known as the Iron Condor, which utilizes two Nadex GBP/USD spreads. Regardless of how the market moves, the trader is allowed an opportunity to collect a premium. When the trade is entered, the ceiling of the purchased spread should meet the floor of the sold spread where the market is trading.

Collecting Trade Premiums

If and when a pullback happens during the Iron Condor Strategy, both trades profit relative to the center while the market is fluctuating. Once the time has expired, both spreads can profit. The result is that the trader is able to collect a premium. Traders can maintain the risk of the trade at a realistic 1:1 potential, so nothing is risked beyond the floor and ceiling of spreads.

This is a great trade for demonstrating the potential of strong but flat market reactions.

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