Trade Tip For Canadian Foreign Securities Purchases

Canadian Foreign Securities Purchases, also known as International Transactions in Securities, will be released Monday, April 18, 2016, at 8:30 AM ET. Foreigners who buy domestic stocks, bonds, and money-market assets must purchase them with domestic currency, thus linking the demand for each. There is one trade idea for this news event based on previous market reaction and using Nadex spreads with an Iron Condor strategy.

The trade can be entered as early as 8:00 AM ET for 10:00 AM ET expirations. The profit potential should be $30 combined between the spreads, so $15 approximately each spread.

A spread has a floor and a ceiling designating the range of a market you can trade. The spread can be traded long or short and you can’t win or lose past the floor or ceiling. The advantage is the max risk is capped and defined up front.

To set up for this trade tip, one can buy a Nadex USD/CAD spread below the market but with the ceiling where the market is trading at the time, while also selling a Nadex USD/CAD spread above the market and its floor should meet the ceiling of your other spread and also be where the market is trading at the time.