Market Overview

Three CAD Reports Releasing Friday


At 8:30 AM ET, on Friday, February 16, Statistics Canada will release three reports. Each of these reports may impact trading as they vary in importance between low and medium. The reports address topics related to foreign securities purchases and manufacturing sales. Such reports measure changes happening in Canada’s economy. As a result, these reports have the potential to affect the market and provide a trading opportunity.

The outcome on the market for news reports of this nature is generally movement and volatility. Reactions are usually characterized by pullback following the movement. However, there is no guarantee which direction the reports will move the market. Establishing a trade to collect premium and possibly profit regardless of the way the market moves can be the optimal way of approaching such a trade.

One such strategy known as the Iron Condor uses two Nadex USD/CAD spreads. The setup for the strategy requires a trader to purchase a lower spread while its upper spread sold in sync. The ceiling of the spread purchased should meet the floor of the spread sold where the market trades at the moment of entry.

As the movement gives way to pullback, both spreads can profit regardless of the way the market moves. This results in a collection of premium. Traders can further manage risk toward maintaining a 1:1 ratio. Still, there is no risk beyond the floor and ceiling of spreads. As the 10:00 AM ET expiring spreads become available for trade at 8:00 AM ET Friday, this kind of trade can be initiated. Traders can use this trade to become familiar with market reactions to news events. Learn by practicing in a Nadex demo account. Once proficient, switch to live trading of the news. Day trading education is offered free at Apex

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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