Collect Premium Using The Iron Condor On Release Of US Production News

Utilization and production news is due out Friday. The Capacity Utilization Rate tells of the percentage of resources being used by manufacturers, mines and utilities. When full capacity is nearing, producers tend to raise their prices creating inflation. Industrial Production is also being released, informs the public of the change in inflation-adjusted value of what is produced by manufacturers, mines and utilities. With this news, comes the opportunity to trade the EUR/USD market using Nadex spreads employing an Iron Condor strategy.

Based on previous market movement to this news event, it was found that the market tends to make a move and then pull back. To set up the Iron Condor, buy a lower spread below the market but with the ceiling where the market is trading at the time. You also sell an upper spread above the market but with the floor where the market is trading at the time. Each spread should have a profit potential of $15 or more.

Iron Condor Premium Collection Trade

The news is released at 9:15 AM ET, Friday, April 15, 2016. Enter as early as 8:00 AM ET for 10:00 AM ET expirations. Once the news is released, the market tends to move and pull back. Max profit happens when the market is right between the spreads at expiration. This means the Iron Condor has effectively collected the premium from both spreads.

Be sure, to place limit take profit orders in case the market takes off in one direction, one spread or side of your trade can profit. If or when the market pulls back, then the other spread may profit as well, if you don’t exit the other spread. The max risk is what you pay to enter the trade however; it is not your realistic risk. This strategy keeps your risk to a 1:1 max risk/reward ratio. Where the market would move up or down 60 pips are the points to enter for your stop limit orders. The breakeven points are where the market moves up or down 30 pips. If the market is anywhere in between your breakeven points at expiration, you will profit.

Be sure to use the spread scanner available free to all traders at www.apexinvesting.com, which makes it easy to find the spreads. On it, you will see the floors, ceilings and reward potential for each spread. The ticket icon is what you click to enter your order info. Orders are filled immediately, once submit is clicked. You will need to be logged into a demo or live Nadex account, which takes only moments to open.

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For a complete calendar of news events to trade along with strategies, go to www.apexinvesting.com. Nadex is a CFTC regulated US based exchange and can be traded from 48 different countries.