Mystery traders 'made $1.8bn from stock bet' placed hours before Trump tweeted talks with China were ‘back on track’

[bostonangler]

Unknown actors may have made billions from the turmoil Donald Trump has created in the markets through erratic tweets, shoot-from-the-hip foreign policy, and the trade war with China, according to a new report.

A Vanity Fair deep-dive into stock market activity has uncovered several instances where advantageous trades were made suspiciously close to market-moving events.

One trade, made just before Iranian drones attacked Saudi Arabian oil production facilities, netted $180m. Another trade, made shortly before Mr Trump announced a delay in tariffs on Chinese goods, made $190m. The biggest trade of all came on June 28, while Mr Trump was at the G20 meeting. There, he met with President Xi and announced trade negotiations were "back on track."

Those trades ended up being worth $1.8bn thanks to an 84 point boost in the S&P 500 index following Trump's announcement.

 

Though the story quotes an unnamed commodities trader as saying “there’s something fishy going on”, other analysts disagree. One who spoke to Bloomberg said that without the trading records, insider trading would be impossible to prove, and that in the futures market, trades that make large amounts of money fast are actually not uncommon. It's even impossible to know how if all that money went to one entity or perhaps several who happened to make a lucky bet.

“Millions of futures contracts trade a day, billions of dollars trade a day, so to make a connection, I feel like it’s very hard to do,” Michael O’Rourke of JonesTrading told Bloomberg.

According to Slate, just knowing when trades happen isn’t enough to prove how much money they made - you’d also need to know how long the buyer held onto those shares.

There's no suggestion in the article that Mr Trump or anyone in his circle is involved in insider trading.

Whether or not the story itself holds up - the author admits that it’s impossible to know who is making these trades without an SEC investigation - Goldman Sachs and JPMorgan have both said that they believe Trump’s tweets affect the markets. JPMorgan even created its now famous Volfefe Index - a combination of the Trump tweet typo “covfefe” and “volatility - to track the effects of the President’s tweets on the US bond markets.

According to Bloomberg, tweets with the words “China,” “products,” “billion,” “great,” and “Democrats” were most tightly correlated with market movement

https://www.yahoo.com/news/mystery-traders-made-1-8bn-191335811.html

 

Who didn't see this coming? I knew someone was trading on info about what Trump was saying to move the markets... Someone should be sent to the big house for this insider trading, but the entitled and elite always cash in...

B/A

[bostonangler]

Investors Are Getting Rich Trading Based on Donald Trump's Tweets. Is It All Just a Coincidence?

It’s no big secret that President Donald Trump’s actions, and particularly his tweets, tend to cause the stock market to fluctuate. Have some traders found a way to capitalize on Trump’s tweets and seemingly offhand comments? Vanity Fair would like to know.

According to an investigation by Vanity Fair, there have been a number of recent purchases of “S&P e-minis,” futures contracts tied to the Standard & Poor’s 500 stock index, which were so well-timed as to be suspicious.

Trump’s ongoing trade war with China has been roiling both economies, and any positive news about a possible resolution tends to cause a stock-market uptick. Recently, traders have made some very big trades with huge financial rewards mere hours before Trump mentioned something about progress in trade war negotiations, and the Vanity Fair story explores the possibility that these trades are being made with inside knowledge.

For example, Vanity Fair points out that on Sept. 10, “in the last 10 minutes of trading,” a trader purchased 82,000 S&P e-minis when the index was trading at 2,969. “A few hours later,” the Chinese government announced it would lift tariffs on a range of American-made products, causing a stock-market surge. The lucky (or “lucky”) purchaser made a cool $190 million in one day.

Another example is that on June 28, a group of traders purchased “420,000 September e-minis in the last 30 minutes of trading.” At that point, Trump was already at the G20 summit, and he announced that trade talks with China’s President Xi Jinping were “back on track.” The next week, the S&P jumped 84 points, or $4,200 per e-mini contract. “Whoever bought the 420,000 e-minis on June 28 had made a handsome profit of nearly $1.8 billion,” VF reported.

Trades are anonymous, but regulators can figure out who is making these moves, and there are ways to detect if they have privileged information or are just really lucky. Vanity Fair reached out to all the prominent regulatory agencies to see if they are looking into these trades, and didn’t get much. A representative for the Securities and Exchange Commission declined to comment, the Commodity Futures Trading Commission didn’t respond to an inquiry and the Chicago Mercantile Exchange said “the trades in question did not originate from a single source and they were of no concern.”

For its part, Bloomberg talked to some Wall Street pros who think Vanity Fair’s suspicions may be overblown.

Industry insiders point out that big trades are very common, and the market is especially volatile these days. Sometimes a coincidence is just a coincidence. Given how often traders move “tens of thousands of futures contracts at once,” Bloomberg noted, and how often Trump’s comments move the market, “someone looking for suspicious timing is guaranteed to find it.”

https://www.yahoo.com/finance/news/investors-getting-rich-trading-based-155328380.html

 

 

Fricking crooks...

B/A

[bostonangler]

CME dismisses Vanity Fair story on Trump chaos trades as 'patently false'

A viral Vanity Fair article that suggested traders may have had foreknowledge about a series of geopolitical events — and profited handsomely from them — is “patently false,” according to the Chicago Mercantile Exchange.

On Thursday, author William Cohan published an article that linked mysterious trading in S&P 500 (^GSPC) futures contracts to market-moving developments like the September 13 drone attack on Saudi Arabia’s oil facilities, the U.S.-China trade war and Hong Kong’s independence protests.

Euphemistically called “chaos trades,” the article alleged someone connected to President Donald Trump’s administration may have helped investors front-run trades based on illicit or insider knowledge of world events, who then reaped hundreds of millions in profit. The story reverberated across social media, with some observers saying it implicated the besieged Trump administration in a new ethical quandary.

But in a tersely worded statement issued late Friday, the CME — which regulates S&P futures contract trading — said it “regularly monitors its markets for suspicious activity,” and dismissed the allegations. A number of Wall Street analysts have also called the story’s thesis into question.

Trump’s prolific use of Twitter to make policy statements routinely ratchets up trading volatility, one reason why the Vanity Fair article called into question some of the trading surrounding his tweets on market-moving events.

“As it relates to the Vanity Fair article published on October 17, 2019, regarding activities in the E-mini S&P 500 futures contract, the allegations about the trading activity are patently false,” the exchange said. “These transactions were entered into by a significant number of diverse market participants.”

In the days since the article’s publication, a few market observers have chipped away at its premise. Since futures are hedges against other market positions, it’s likely a gain in one position just offsets losses in another.

George Pearkes, a global macro strategist for Bespoke Investment Group, wrote an analysis published by Business Insider that the E-mini trading represented “typical futures trading activity” derived from multiple investors — and that it was virtually impossible to pinpoint exactly when those trades were executed, or by whom. He added that the article presented “flimsy claims” advanced mostly by antipathy toward Trump.

In an interview with Yahoo Finance on Friday, Cohan defended the observations he articulated in his article. He pointed out that traders who actively create positions in S&P minis were the ones who flagged the suspicious nature of the trades.

“Human nature would dictate that if you were able to make $180 million profit on a smart trade in a few days or a week, you’re going to take that profit and move on to the next thing,” he told YFi PM.

“We certainly don’t know who placed these trades, and that’s something the regulators should be looking into,” Cohan said, backing calls for an investigation as “totally appropriate.”

https://finance.yahoo.com/news/cme-dismisses-vanity-fair-story-on-trump-trades-as-patently-false-120617006.html

B/A

[md11fr8dawg]

So which is it, they did inside trade or they didn't. And what news sources do we believe in today's world?? One says this, another says just the opposite.

[bostonangler]

3 hours ago, md11fr8dawg said:

So which is it, they did inside trade or they didn't. And what news sources do we believe in today's world?? One says this, another says just the opposite.

 

Well I know I don't trust the people on wall street. And we know the markets can be manipulated. Here are some interesting facts about the markets and 9/11...

 

On September 19, 2001, CBS reported:

Sources tell CBS News that the afternoon before the attack, alarm bells were sounding over unusual trading in the U.S. stock options market.

An extraordinary number of trades were betting that American Airlines stock price would fall.

The trades are called “puts” and they involved at least 450,000 shares of American. But what raised the red flag is more than 80 percent of the orders were “puts”, far outnumbering “call” options, those betting the stock would rise.

Sources say they have never seen that kind of imbalance before, reports CBS News Correspondent Sharyl Attkisson. Normally the numbers are fairly even.

After the terrorist attacks, American Airline stock price did fall obviously by 39 percent, and according to sources, that translated into well over $5 million total profit for the person or persons who bet the stock would fall.

***

At least one Wall Street firm reported their suspicions about this activity to the SEC shortly after the attack.

The same thing happened with United Airlines on the Chicago Board Options Exchange four days before the attack. An extremely unbalanced number of trades betting United’s stock price would fall — also transformed into huge profits when it did after the hijackings.

“We can directly work backwards from a trade on the floor of the Chicago Board Options Exchange. The trader is linked to a brokerage firm. The brokerage firm received the order to buy that ‘put’ option from either someone within a brokerage firm speculating, or from one of the customers,” said Randall Dodd of the Economic Strategy Institute.

U.S. investigators want to know whether Osama bin Laden was the ultimate “inside trader” — profiting from a tragedy he’s suspected of masterminding to finance his operation. Authorities are also investigating possibly suspicious trading in Germany, Switzerland, Italy and Japan.

On September 29, 2001, the San Francisco Chronicle pointed out:

“Usually, if someone has a windfall like that, you take the money and run,” said the source, who spoke on condition of anonymity. “Whoever did this thought the exchange would not be closed for four days.

“This smells real bad.”

***

There was an unusually large jump in purchases of put options on the stocks of UAL Corp. and AMR Corp. in the three business days before the attack on major options exchanges in the United States. On one day, UAL put option purchases were 25 times greater than the year-to-date average. In the month before the attacks, short sales jumped by 40 percent for UAL and 20 percent for American.

 

***

Spokesmen for British securities regulators and the AXA Group also confirmed yesterday that investigations are continuing.

The source familiar with the United trades identified Deutsche Banc Alex. Brown, the American investment banking arm of German giant Deutsche Bank, as the investment bank used to purchase at least some of the options.

***

Last weekend, German central bank president Ernst Welteke said a study pointed to “terrorism insider trading” in those stocks.

On October 19, 2001, the Chronicle wrote:

On Oct. 2, Canadian securities officials confirmed that the SEC privately had asked North American investment firms to review their records for evidence of trading activity in the shares of 38 companies, suggesting that some buyers and sellers might have had advance knowledge of the attacks.

***

FMR Corp. spokeswoman Anne Crowley, said her firm — which owns the giant Fidelity family of mutual funds in Boston — has already provided “account and transaction” information to investigators, and had no objection to the new procedures announced yesterday. Crowley declined to describe the nature of the information previously shared with the government.

So the effort to track down the source of the puts was certainly quite substantial.

What were the results of the investigation?

Apparently, we’ll never know.

Specifically, David Callahan – executive editor of SmartCEO – submitted a Freedom of Information Act request to the SEC regarding the pre-9/11 put options.

The SEC responded:

We have been advised that the potentially responsive records have been destroyed.

If the SEC had responded by producing documents showing that the pre-9/11 put options had an innocent explanation (such as a hedge made by a smaller airline), that would be understandable.

If the SEC had responded by saying that the documents were classified as somehow protecting proprietary financial information, I wouldn’t like it, but I would at least understand the argument.

But destroyed? Why?

https://www.globalresearch.ca/unusual-trading-in-stock-options-prior-to-9-11-government-destroyed-documents-regarding-pre-9-11-put-options/19750

 

 

Someone made a lot of money on the effects of Trumps comments about the trade war and China, the question is who?

B/A

Edited October 19, 2019 by bostonangler

[md11fr8dawg]

Thanks for the article BA. I had not seen the article before. Was not that big of a news story and we all know why. Like you I damn sure don't trust the crooks son Wall Street. Somebody's arse needs to hung out for this. But as usual nothing will be come of it. Damn!