Bank of Canada will be releasing their Monetary Policy Report, Rate Statement and Overnight Rate coming this Wednesday morning at 10:00 AM ET, January 20, 2016. These are important reports regarding the bank’s views on the economy shaping their monetary policy and bank rate decisions. Since the reports certainly tend to move the market based on past market analysis, a straddle strategy using Nadex spreads could make sense.
A straddle strategy works well for moving markets taking off in a particular direction. Straddles have low risk, so there are no stops required.
For this trade once the market takes off, one side of the trade will profit while the other side will lose. Therefore, the market needs to move far enough to cover the loss of the other spread, the cost of the profiting spread and then make some profit.
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