Swiss Producer Price Index Coming Out: Get In On The Trade

The Swiss Federal Statistics Office will be releasing the PPI for Switzerland early in the morning Tuesday, December 15, 2015. Since it’s more like the middle of the night US time, the strategy to trade this event enables you to enter the night before for a morning expiration time. PPI stands for Producer Price Index and the report focusses on changes in the price of goods and raw materials manufacturers have purchased. Manufacturers normally pass on any higher costs they may have to consumers therefore, higher purchase prices for them is a leading indicator for consumer inflation.

For this event based on previous market data, it is recommended to do an Iron Condor using Nadex USD/CHF Spreads. You can enter the trade as early as 11:00 PM ET, Monday, the night before, for 7:00 AM ET expirations. An Iron Condor involves two spreads, one below the market and one above the market. A spread allows you to trade a range of the market based on its floor and ceiling. Depending on the direction you trade the spread, you cannot win or lose past the floor or the ceiling. In addition, you know your max risk up front and that is the amount you put up to enter the trade.

Strategy Has A Max 1:1 Risk/Reward Ratio

That amount may seem like a lot to put up to enter and to risk, however because you will use stops and/or a manual exit, you don’t risk the full amount. The trade strategy is based on a 1:1 max risk/reward ratio.

You want to buy the lower range spread and sell the upper range spread. The ceiling of the bought spread should match the floor of the sold spread and be where the market is trading at the time. In addition, you want a reward or profit potential of $35 or more combined between the spreads. How do you find these spreads? How do you make sure they meet all these parameters? You use the spread scanner at www.apexinvesting.com. You need to have a Nadex demo or live account and be logged in. Then you can go to the Apex website and open the spread scanner. You can see below that the spreads are listed down the center with the floor on the left and ceiling on the right. You will also see the Risk/Reward column for the Sell side all the way to the left and for the Buy side all the way to the right.

To view larger image click HERE.

First, find the spreads with the right ceiling and floor numbers being where the market is trading as mentioned above. Then once those spreads have a reward potential of around $17 or more each for a combined reward potential of around $35 or more, enter the trade. Do not enter until everything meets the parameters; never force a trade. Be sure to try the trade in demo first before doing it live.

After previous releases the market has either stayed in a range or made a move and pulled back, which makes an Iron Condor strategy an ideal setup. Max profit for this trade is the trade expiring and the market being right where it was when you entered. However, the market can move and pull back or it can stay in a range close to where it was when it started and you will still profit. For every pip away the market is from the center of your spreads, it is only $1 less in profit. Depending on your exact entries, the market can move up or down 35 pips and your trade will be breakeven. For this trade, the 1:1 max risk/reward ratio is when the market moves up or down approximately 70 pips, again depending on exactly where you entered, is the place to exit the trade or to set your stops.

To learn more about how to place news trades including a complete calendar with strategies, go to www.apexinvesting.com. There you will find free education on how to trade Nadex spreads and binaries as well as futures, forex, and CFDs. Nadex is a US based CFTC regulated exchange and can be traded from 49 different countries. You can also enter and exit your trades at any time to protect profits and manage risk as long as there is a trade on the other side.