Is it possible to take a position in the market right after a big announcement?

L

l3randonf

For example, Bloomberg's economic calendar shows that at 0830am tomorrow morning, there will be "personal income and outlays" announcement. According to Bloomberg, this is a "market moving indicator".

So, lets say this announcement is negative and thus, you conclude that the market will move down.

Can you place a call credit spread on an option that generally follows the DJI, such as OEX, just after the announcement to try and take advantage of the bad news? Or, will the market adjust before you are able to take a position?
 
You can do this today before trading closes. But if the market has bad news, it will generally adjust immediately. If there's clear news that will drive the market down, it will move jsut about immediately.
 
You can only execute option orders during regular trading hours.

If that news were to occur during regular trading hours, you could only profit from add'l down move that occurred after you executed your order (let's not get caught up in IV change, etc.).
 
Right - this is probably one of the reasons so many economic reports don't come out until after the close.

You can always gamble if you think the report is going a certain way by taking a position before the close and closing it at the open.
 
Quote from ptrjon:

But if the market has bad news, it will generally adjust immediately. If there's clear news that will drive the market down, it will move jsut about immediately.
More...

Good or bad news, the market tends to adjust for unexpected circumstances faster than Joe SixPack on his dialup service can digest the news and get in his a spread.
 
I would consider going long on the QQQQ puts or calls the day before any announcements. If you expect the market to go down buy ATM puts. The weekly QQQQ options are cheap and it doesn't take much to move them.
 
I think you should make a right decision right after a big announcement, because this announcement could be change some strategies of someone else so they will make we wrong decisions :D. It's our chances to do our business
 
Markets generally react to news faster than you can enter a trade. If anything, with all those hair trigger bots out there, markets tend to overreact to the news in the first hour or two. So you might try playing the inevitable bounce/pull back after the reaction to the news.
 
Quote from xtraderbrokers:

I think you should make a right decision right after a big announcement, because this announcement could be change some strategies of someone else so they will make we wrong decisions :D. It's our chances to do our business
More...
I have the same Idea with you, This could be a good chance for us to do our trade. making money is our favourites
 
Quote from rew:

Markets generally react to news faster than you can enter a trade. If anything, with all those hair trigger bots out there, markets tend to overreact to the news in the first hour or two. So you might try playing the inevitable bounce/pull back after the reaction to the news.
More...
exactly, when you react to the news, I think the market has been changed so quickly, but it can be a red cross
 
You must log in or register to reply here.
Back
Top