Key insights
- The article discusses the potential for retail investors to profit from after-hours trading based on geopolitical news, specifically a hypothetical truce between the US and Iran announced via Truth Social. It questions whether retail investors can react quickly enough to capitalize on such events before institutional investors, acknowledging that while all investors benefit from positive news, early movers gain an additional advantage. The overall impact on US equities is slightly positive due to reduced geopolitical risk.
Seconds after President Trump made a Truth Social Post saying there would be a 2-week truce between the USA and Iran, the S&P 500 Funds in after-hours trading went up 2.8%. Could a retail investor who had his finger on the button make any money on these types of posts? Or would the institutional investors have already bought in less than a second and were already on their way to making lots of money? By the time the stock market opens, the bump based on the 2-week truce is already in the stock price of the S&P 500. (Yes, the stock price increases due to the truce, which helps the stock price for all investors, but moving the second the truce is announced would give you a double advantage.)