Monthly Release Of Retail Sales and CPI Offers Iron Condor Trading

Every month the Bank of Canada releases the Core Consumer Price Index (CPI), which measures inflation, as well as the Core Retail Sales and Retail Sales, which show the majority of economic activity. These reports come out about 20 days after the month ends. Scheduled news events can be tracked, and when markets show some consistency in movement in reaction to that news, trade strategies can be planned.

For this set of reports, an Iron Condor aiming for a profit potential of $30 can be traded using Nadex USD/CAD spreads. The average move is around 30 pips. To set up this strategy, one could buy a spread with the ceiling where the market is trading at the time and sell a spread with the floor where the market is trading at the time. Each spread should have a profit potential of around $15 or more. The reports are released at 8:30 a.m. ET, and the trade can be entered as early as 8:00 a.m. for the two hour expirations.

Selling the upper spread and buying the lower spread is a way to expect the market to settle in between the two spreads, around where it was at entry. The breakeven points for this Iron Condor with a profit potential of $30 or more is 30 pips up and 30 pips down. Should the market settle anywhere in between those points, a profit is made. The maximum profit potential can be made when the market is right between the two spreads.