A Spread Strategy For Trading Production News From The UK

Manufacturing Production for the UK reported in January was down 0.4% and Industrial Production for the UK was also down 0.7%. These reports are indicators on the health of the economy as production reacts quickly to ups and downs in the business cycle and can affect employment and earnings levels.

For those reasons, traders pay attention to this news. Fortunately, there is a trade strategy that works whether the news is positive or negative. Using Nadex spreads and a neutral Iron Condor strategy, the market can react and go up or down or remain in a tight range and this strategy can capture profit.

Since the numbers are released at 4:30 AM ET Wednesday, February 10, 2016, this strategy is planned for you to enter as early as 11:00 PM ET Tuesday, the night before. Who wants to wake up in the middle of the night to trade? Not many, and placing the trade the night before makes this strategy convenient and possible to trade news that comes out at 4:30 AM ET. Nadex Spreads are one option.

The Floor And The Ceiling Of A Spread

A spread has a floor and a ceiling, which define the range of the market you can trade long or short. Spreads have capped risk and profit because you can’t win or lose past the floor or the ceiling depending on the direction you trade them. 

Based on market movement analysis done on the past 12 - 24 reports, it was found that $35 combined between the spreads was a high probability profit potential. 

With $35 or more profit potential, the market can move up 35 pips and down 35 pips. For every pip away from the center, it is only less $1 profit.