Canadian Manufacturing Sales Ripe For An Iron Condor Trade

Statistics Canada releases the Manufacturing Sales around 45 days after an end of a month. This number shows the change in manufacturing sales. This is important to traders due to its reflection of possible future market conditions. A change in sales can indicate changes in their spending, hiring, and investment. This Manufacturing Sales news will be released Tuesday, May 17, 2016, at 8:30 AM ET. This event can be traded with low risk using Nadex spreads and an Iron Condor strategy.

For this Iron Condor strategy, two Nadex USD/CAD spreads are traded. Buy a spread below the market, with the ceiling where the market is trading at the time, and sell a spread above the market, with the floor where the market is trading at the time. Enter the spreads at 8:00 AM ET for 10:00 AM ET expiration.

Easy To Find These Spreads

To find the spreads quickly, use the spread scanner and find the spreads with the right profit potential for this trade, which is $25 or more combined between the spreads. Therefore, each spread should have a profit potential of around $13 or more.

The risk/reward amounts for each spread are shown to the left for selling spreads and to the right for buying spreads. Below is an example of the spread scanner displaying risk/reward of spreads. Once you find the spreads with the right reward potential, verify that the ceiling and floor parameters fit.

To view image click HERE.
USD/CAD

At first, it may seem like the risk greatly outweighs the possible profit. By placing stop limit orders at the 1:1 risk/reward ratio points, risk is now managed and more realistic: $25 risk for $25 reward. Place stops approximately 50 pips up or 50 pips down from where the market was when the trade was entered.

The market tends to react and then pullback after the news is released. If it pulls back to where it started, the trade has made max profit. If, at expiration, the market is somewhere in between the breakeven points, approximately 25 pips up or down, then the trade has make some profit. At settlement, the trader is returned the amount paid to enter the trade plus or minus any profit or loss respectively.

Free education and the spread scanner are available at www.apexinvesting.com. Nadex is a CFTC regulated US based exchange.