An Evening Trade Opportunity For Those Who Can't Trade Daytime Hours

Purchasing Manager’s Index for the construction industry will be released Thursday at 4:30 a.m. ET. Don’t worry- that doesn’t mean having to wake up in the middle of the night to trade! This news can be traded as early as 11:00 p.m. the evening before.

The Construction PMI for the UK is a leading indicator for economic health as it portrays the results from 170 surveyed purchasing managers. Since these managers must react quickly to changing conditions in their industry, they have the most current insight for employment, production and new orders in the construction business.

For this trade, an Iron Condor, using Nadex GBP/USD spreads, works well for the typical market reaction to this news. This usually consists of a move and then a pullback. To set up, one could buy a spread below the market and sell a spread above the market. The ceiling of the bought spread should meet the floor of the sold spread and be where the market is trading at the time. The reward potential for this trade should be $35 or more, or around $17 each per spread.

Limit risk by placing stop limit orders where the market would move up or down approximately 70 pips. That is where the 1:1 risk/reward ratio points are located. If the market settles anywhere between the breakeven points, 35 pips up or down, then the trade profits. Max profit is when the trade settles between the two spreads. More contracts can be traded with this strategy, to increase profit potential; however, it will also increase risk. Just be sure to have the same number of spreads on each side.