Trading Catalysts: How Events Move Markets and Create Trading Opportunities

"Trading Catalysts takes you into the market and recounts moment-by-moment price action. From an almost 14% rise in the Nasdaq following a surprise Fed rate cut to an incredible (and temporary) 22% decline in the S&amp;P 500 futures price folliwng a single large sell order, Trading Catalysts is loaded witih real-life examples of how events move markets. Must reading for traders and investors alike." --Victor Canto, Pd.D., founder of La Jolla Economics and a columnist for The National Review "At last...an invaluable investment book that shows in detail how markets actually behaved during extreme events, times when fortunes were won or lost in the blink of an eye. This is the real world of trading and risk, not academic theory. Read, learn and prepare yourself because these types of extraordinary events will happen again." --Peter Matthews, Managing Partner, Optimation Investment Management LLC Understand the Triggers of Market Volatility—and Take Advantage of Them <ul>
<li> Actionable lessons from 25 years of major events—and the market’s reactions to them </li>
<li> Predicting the market impact of everything from Fed statements to natural disasters </li>
<li> Separating real information from noise, major “market movers” from trivia </li> </ul>
In Trading Catalysts, Robert I. Webb examines the various factors that move markets. Webb focuses on the catalysts that spark the biggest price changes—and the greatest potential for substantial profits or losses. Using numerous real market examples, Webb demonstrates the often inconsistent response of prices to similar trading catalysts across markets and over time, the occasional significantly delayed response, and the frequent market overreaction. Whether traders bet directly on a trading catalyst, on the presumed market reaction (or overreaction) to it, or not at all, the potential impact on market prices and volatility means that all traders must pay attention to trading catalysts and the market reactions that they induce. At the very least, the prospect of significant volatility around some event may affect the timing of a trader’s entry or exit of positions and may cause a trader to reduce his position size. If you’re a serious trader, this book will help you understand the influence of trading catalysts and identify potential trading opportunities. Volatile financial markets create both the risk of substantial losses and the opportunity for substantial gains. Sudden jumps or breaks in prices can impart a roller-coaster-ride-like quality to trading or investing in financial markets. Trading Catalysts is the first complete guide to the events that spark large changes in prices. These include: central bank actions; ill-advised comments by policymakers; news of natural disasters; elections; certain economic reports; terrorism; company specific announcements; the unwinding of large positions by key market participants; and simple trading errors among others. The varied origin of trading catalysts means that some traders may have an edge in anticipating the market’s reaction to certain trading catalysts. Numerous real market examples take the reader into the heart of the market to illustrate the direction, magnitude, speed, duration, intensity and breadthof influence of trading catalysts on market prices. Because a minute can be a “lifetime” in the world of trading, many of the detailed examples recount moment-by-moment and tick-by-tick changes in market prices. This book discusses the role that trading theses(or prevailing beliefs about market relationships), market conditions,and sentimentplay in determining how prices react and sometimes overreact to various trading catalysts over time. Trading Catalysts will help readers anticipate potential events that could spark rallies or breaks; predict situations with feedback loops that drive markets up or down; and identify situations where substantial overreactions are likely to occur. <ul>
<li> Size Matters: When key players unwind positions and move the markets </li>
<li> The Information in Economic Reports: Rout or Rally? Uncertain market reaction to the forecast errors from economic reports </li>
<li> Talk Isn’t Cheap: When the comments of politicians and policymakers move markets </li>
<li> Market Interventions: When governments intervene: case studies, from currencies to oil </li>
<li> Geopolitical Risk: From elections to terrorism to wars </li>
<li> Bubbles, Crashes, Corners, and Market Crises: Lessons from the “silver corner,” the 1987 stock market crash, and the Asian Financial Crisis </li>
<li> Quantifying the Market Impact of Natural Disasters: From earthquakes to floods to mad cow disease </li>
<li> Fat Fingers: When trading errors and mistranslations move the market </li>
<li> Of Straws and Camels’ Backs: When trivial news sparks huge moves </li> </ul> Preface Chapter 1: Introduction Chapter 2: Market Conditions and Sentiment Chapter 3: Talk Isn’t Cheap Chapter 4: Geopolitical Events Chapter 5: Weather and Natural Disasters Chapter 6: Market Interventions Chapter 7: Periodic Economic Reports Chapter 8: Size Matters Chapter 9: Bubbles, Crashes, Corners, and Market Crises Chapter 10: The Accidental Catalyst Index

Trading Catalysts: How Events Move Markets And Create Trading Opportunities

Business & Money

Webb, Robert I.

Economics

Ft Pr

In a world where 80% of trades are done by lightning-fast machines, and the news from China hits markets in New York before you can read a headline, trading has never been this dangerous--or potentially profitable. We live in the age of shock markets, where sudden sharp changes are common, crashes are unavoidable, volatility is off the charts, and anything can happen. This presents great risk--and great potential reward. Seemingly distant factors can massively and instantaneously impact prices in today's deeply interconnected, high-speed financial markets. ShockMarkets illuminates these catalysts, helping you plan and react to fads, fashions, bubbles, crashes, and market crises--and uncover profit where others find only peril. Through detailed, moment-by-moment analysis, Robert Webb and Alexander Webb upend conventional wisdom about trading and investing--revealing surprising and little-known trading relationships: * Why Gold lost money in the 20th century's largest crises * Which political actions trump economic fundamentals * How videogame reviews create predictable, tradable shocks * When a shock is just a shock--and when it's the beginning of a trend * Why humans can still win at trading The markets are moving faster than ever before--Shock Markets keeps you ahead of the curve.

Shock Markets: Trading Lessons for Volatile Times

Webb, Alexander

Investing

State governments are ultimately competitors in their economic policies when people, products and capital are free to move across state borders. Nowhere is this competition more apparent than in the United States where individual states compete to promote economic growth by attracting industry with tax holidays, outright grants, subsidized financing and other means. Yet, the arguably greater influence of state fiscal policy on investment decisions has largely been ignored. This book redresses that deficiency by providing a collection of chapters which discuss the theoretical and practical linkage between investment strategy and state economic policy. Specifically, it uses changes in relative state burdens as a measure of state fiscal policy and shows that by altering the incentives to work, save and invest, changes in a state's tax burden relative to other states influence decisions on whether, how much and where to invest.
The book is divided into three parts. The first section provides the theoretical framework for the book and discusses application of the basic model to explain the persistent differences in observed real income across states; the level of economic activity; and business starts and failures. The second section discusses, among other things, the implications of changes in state economic policy for investments in real estate; common stocks of small capitalization firms; and state general obligation bonds. The third section of the book, which examines the political dimensions of state economic policy, begins with a discussion of the effect of state economic policy on relative population shifts and reapportionment and ends with a proposal for a flat tax.

Investment Strategy and State and Local Economic Policy

Laffer, Arthur

Canto, Victor A.

Praeger

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