I’m looking to share discussion on a possible US/China trade deal and how to trade that if it happens short term (before end of 2018). I have a small account for a possible speculative play around a possible deal. My thesis is that a large trade deal moves US markets pretty green on that event IF*/WHEN* that happens. I don’t think a big trade deal will magically happen overnight without an incredible amount of press leading up to it.
Looming tariff increases Jan 2019 and G20 talks (stuff you already know):
Trump has promised to increase the Chinese tariffs from 10% to 25% Jan 1st, 2019 in writing so there's some urgency to trying to solve something before 2019 for those affected parties/interests by the coming tariff increases. The G20 conference in South America is Nov 30 thru Dec 1st and the U.S. and China are sitting down to talk then before the end of the year.
Some 2018 scenarios (very small list here as anything can happen before 2019 tariffs):
-G20 talks go nowhere, uncertainty continues, no deal of any type and tariffs go on 2019 as planned. I’m assuming a decent chuck of stocks head lower at that point closer we get to January 1st, 2019 and beyond as the tariffs increase having a big impact that way.
-The U.S. hold’s off on that increase with a possible new agreement of a sit down at a later date/small deal. Maybe a small rally or sideways?
-A big trade deal is announced sometime before 2019. I'm assuming huge gap up if this happens.
Trading Idea’s and questions: Just wondering what some of you are going for some short term plays on this and what you are thinking on the matter.
Perhaps buy some calls before the G20 in case the market rises on a possible deal if it becomes more talk? Same vein as buy the rumor sell the news here so sell calls before g20?
VIX options either way before or after G20?
What happens if a big trade deal gets announced during market hours? Run to buy your nearest favorite calls?
Alternatively, how to play this if a big trade deal gets announced Premarket or afterhours. Most big brokers have extended hours trading (4 am to 8 p.m.) and it looks like TDA has some 24/5 trading on the index’s (SPY/QQQ).
If a big deal is announced PM/AH, thoughts on what to buy shares of? Beaten down companies affected from tariffs? Go index and buy SPY/QQQ shares or some leveraged index funds (like SQQQ)??
Should I look into futures trading with SPX (I haven’t done futures before)?
Anything you are willing to share on what you are planning on doing?
Submitted November 10, 2018 at 06:30PM by AbeFromanLovesYou https://ift.tt/2Pl59W6
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