Managing risk of unpredictable, abrupt tweets that cause volcanic reversal action

[ET180]

"How do you manage this kind of risk that seem like lightning strikes out of nowhere?"

Reduce exposure. With VIX high, I look for opportunities to replace equity exposure with short option exposure where it makes sense to take advantage of the higher volatility.

 

[ironchef]

Recently, there is a new phenomenon in the markets. Unpredictable, abrupt tweets can come out of nowhere that cause financial markets to make volcanic reversal action.

Someone very powerful up there flip flops unpredictably. One moment he says "They want to make a deal." Next moment, he throws a tantrum and tweets he wants to impose tariffs. Recently, this powerful force even threatened to impose a state of emergency to force American companies to stop dealing with China. Sometimes, he says he gets along well with China and the great leader of China is his friend. Sometimes, this friend becomes his enemy. Lately, he compares Fed Chairman with his China enemy and asks who is the worse enemy of U.S?

Totally mind-boggling. I am at a serious loss and have lost much money due to this flip-flopping force of nature. This president whips and saws traders.

How do you manage this kind of risk that seem like lightning strikes out of nowhere? Can the elitetraders please advise? Thank you very much.

From where you are from and from your handle, (88), I assumed you understand Chinese: Crisis = danger and opportunity.

Seems like until something breaks, the market is range bound based on tweets.... But what do I know, I am just a retail like you.