Sputnik: Donald Trump’s tweets can cause the stock market to go up and down, that’s for sure. A viral article alleges that some have made billions of dollars off big bets on the market with the help of what looks like advance knowledge of the situation. The exchange where the bets were placed, as well as some market analysts, dismiss the allegations.
In Vanity Fair’s research into the advantageous stock-market deals of the recent months, William Cohan has claimed that mysterious traders have profited massively by buying or selling futures contracts at the end of trading days, coincidentally shortly before the headlines made by the Trump administration moved markets.
According to the report, the sale of 120,000 S&P e-minis – futures contracts traded electronically on the Chicago Mercantile Exchange (CME) – prior to the 14 September drone attack on Saudi oil facilities brought the seller $180 million in profits.
Another deal – this time the purchase of 82,000 e-minis hours before Trump delayed a planned tariff hike on Chinese goods – reportedly netted a profit of about $190 million.
Apparently the wisest move was to buy 40 percent of the day’s trading volume of e-minis shortly before the closing bell prior to Trump’s announcement at the G20 summit on 28 June that the US and China resumed trade talks. Whoever made the purchase was said to have pocketed nearly $1.8 billion.
“There is definite hanky-panky going on, to the world’s financial markets’ detriment. This is abysmal,” a CME trader is quoted as saying.
And from Vanity Fair, after Sputnik’s lame attempt to debunk charges using spurious sources and its now usual fake news:
“In the last 10 minutes of trading at the Chicago Mercantile Exchange on Friday, September 13, someone got very lucky. That’s when he or she, or a group of people, sold short 120,000 “S&P e-minis”—electronically traded futures contracts linked to the Standard & Poor’s 500 stock index—when the index was trading around 3010. The time was 3:50 p.m. in New York; it was nearing midnight in Tehran. A few hours later, drones attacked a large swath of Saudi Arabia’s oil infrastructure, choking off production in the country and sending oil prices soaring. By the time the CME next opened, for pretrading on Sunday night, the S&P index had fallen 30 points, giving that very fortunate trader, or traders, a quick $180 million profit.
It was not an isolated occurrence. Three days earlier, in the last 10 minutes of trading, someone bought 82,000 S&P e-minis when the index was trading at 2969. That was nearly 4 a.m. on September 11 in Beijing, where a few hours later, the Chinese government announced that it would lift tariffs on a range of American-made products. As has been the typical reaction in the U.S. stock markets as the trade war with China chugs on without any perceptible logic, when the news about a potential resolution of it seems positive, stock markets go up, and when the news about the trade war appears negative, they go down.
The news was viewed positively. The S&P index moved swiftly on September 11 to 2996, up nearly 30 points. That same day, President Donald Trump said he would postpone tariffs on some Chinese goods, and the S&P index moved to 3016, or up 47 points since the fortunate person bought the 82,000 e-minis just before the market closed on September 10. Since a one-point movement, up or down, in an e-mini contract is worth $50, a 47-point movement up in a day was worth $2,350 per contract. If you were the lucky one who bought the 82,000 e-mini contracts, well, then you were sitting on a one-day profit of roughly $190 million.”