Retail And Producer Pricing Out This Friday: What To Know

US Economic data regarding retail sales and producer pricing is due out on Friday, January 15, 2016, at 8:30 AM ET.

News releases can be a great time to trade, because news tends to create volatility. If volatility is implied, then premium can be in the pricing of options and be collected when choosing the right strategies.

Specific reports coming out include Core Retail Sales, Retail Sales, Core Producer Price Index and Producer Price Index. Retail Sales is the total value of retail sales and the Core report of it excludes automobiles due to auto sales being volatile. The Producer Price Index measures the change in the price of finished goods and services sold by producers.

The Core report of it excludes food and energy also because those can be highly volatile, distorting the core of producer pricing changes.

To trade these reports using options, you can trade Nadex EUR/USD spreads using an Iron Condor strategy to collect the premium built into the pricing from the implied volatility. The Iron Condor strategy is a strategy that can be used no matter which way the market moves. It’s a great strategy for a market that reacts to the news and makes a move, but not by much, then the market tends to pull back and return. The reward or profit potential you want is $35 or more combined between the spreads. 

For this trade, the market can move up or down 35 pips at breakeven. Max profit is acheived between the two spreads at expiration.