A Premium Collecting Bird, The Iron Condor, For Canadian GDP News

Gross Domestic Product (GDP) will be released Friday, September 30, at 8:30 AM ET by Statistics Canada. GDP is the broadest look of the economy’s health and activity. This news can make for a trade opportunity when there is implied volatility in the market. A majority of the time, the market will move then pull back after its reaction to the news.

Trading Nadex USD/CAD spreads is a way to collect premium when the market moves like that. A spread is bought below the market and for this trade, the profit potential should be around $13 or more. Also, sell a spread above the market with around $13 profit potential or more. 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 news is out at 8:30 AM ET, and the trade can be entered as early as 8:00 AM ET for 10:00 AM ET expiration.

Stops should be placed to keep risk at a realistic 1:1 risk reward ratio. If the total combined profit potential for the trade is $25 or more, then stops should be placed where the market would hit 50 pips above and below from where the market was at entry. Max profit is when the market is back directly between the two spreads at settlement. If the market settles anywhere between 25 pips up and down, then the trade will make some profit. Essentially, the the market has a range of 50 pips where it can be at settlement and this trade will make some profit.

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