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How does somebody like Carl Icahn start trading in the middle of the night? I thought NYSE would be closed! Or is he trading in other exchanges?

Icahn Left Trump Victory Party to Bet $1 Billion on Stocks

It seems like after every unexpected political event, such as Brexit and Trump's elections, an affected country's main stock exchange falls precipitously before rallying to its starting point. I imagine this same thing will happen with France's elections if (when?) Le Pen is elected president. Can an average joe trade when this happens? If so, how?

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    Yes, absolutely yes, but there are huge problems with this way of thinking: first of all, who is specifically an "everyday person"? When you day trade, you have to make bets, and the returns you get are a fraction of what you bet. Second, world events don't always have much of an effect on the stock market, people put money into the stock market for all sorts of reasons. Third, do you want to, or can you, deal with the stress of sitting in front of a computer looking at numbers and making money when there are probably bigger concerns in your life? Most people who try to gamble at a profit lose – thinksinbinary Jan 18 at 2:08
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NASDAQ has Pre and After market :

NASDAQ Trading Schedule Regular Trading Session Schedule The NASDAQ Stock Market Trading Sessions (Eastern Time)

Pre-Market Trading Hours from 4:00 a.m. to 9:30 a.m.
Market Hours from 9:30 a.m. to 4:00 p.m.
After-Market Hours from 4:00 p.m. to 8:00 p.m.
Quote and order-entry from 4:00 a.m. to 8:00 p.m.
Quotes are open and firm from 4:00 a.m. to 8:00 p.m.

You can trade in Pre/After Market but liquidity is very low. If an "unexpected world events" occurs, the volume/liquidity will most certainly increase. Another example is the Forex Market that's open 24/7 around the world.

As one major forex market closes, another one opens. According to GMT, for instance, forex trading hours move around the world like this: available in New York between 01:00 pm – 10:00 pm GMT; at 10:00 pm GMT Sydney comes online; Tokyo opens at 00:00 am and closes at 9:00 am GMT; and to complete the loop, London opens at 8:00 am and closes at 05:00 pm GMT. This enables traders and brokers worldwide, together with the participation of the central banks from all continents, to trade online 24 hours a day.

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  • Had I shorted the Peso, anticipating a Trump win, with my forex broker, I would have made $150,000 for a $25,000 investment. By sheer luck, I happened to be shorting the GBP during one of the Brexit aftershocks (the flash crash a few days later) and made a completely unexpected $800. Pretty much anyone can open a forex account. (Not that you should! I lose money sometimes too.) – David Schwartz Nov 14 '16 at 18:52
  • @DavidSchwartz: Try the Euro after France's elections! – techSultan Nov 14 '16 at 23:37
  • @DavidSchwartz Hindsight is always nice but you had no idea whether Peso would crash after Trump, or by how much. Markets have no obligation to be rational. – Money Ann Jan 19 at 20:35
  • @MoneyAnn Agreed. But there was almost no conceivable way it could have gone up unusually no matter what happened. So it would have been a very sensible risk to take and it would have been quite profitable. – David Schwartz Jan 20 at 22:50
  • @DavidSchwartz I can conceive it easily: The market might overanticipate the drop and make it spring up after, or the lack of drop could be taken as sign of previously unknown strength and create buying pressure. Either one could escalate into a flash bubble. Regardless, the point is that argument from incredulity is probably not a good investment thesis. – Money Ann Jan 20 at 23:50
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The NYSE is not the only exchange in the world (or even the only one in the USA). Amazingly, the London stock exchange works on London time, the Shanghai exchange works on Shanghai time and the Australian stock exchange works on Sydney time.

In addition futures exchanges work overnight.

  • I should have made clear I was talking about the NYSE. I know there are other exchanges around the world. – techSultan Nov 14 '16 at 23:31
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Depending on your country (basically, if you're not a US citizen), you can consider using a CFD brokerage.

A CFD brokerage allows you to trade commodities, currencies, or stocks without having to buy the actual commodities/currencies/stocks since you are trading its value. Your profit comes from the difference in price between the time that you buy and the time that you sell, or the time when you sell and the time that you buy. Obviously, this also implies risks, as you can also lose money if you are not predicting correctly the direction in price of the product you are trading.

Market events, such as elections announcements, or economic data released to the public can have dramatic effects on the price of a financial product and you can take advantage of the market when you trade CFDs with your broker. The trading itself is very straight forward, you need to either BUY or SELL the product if you believe it will appreciate and respectively depreciate in value.

Choosing the right broker is a mission in itself. You need to check what the brokerage has to offer in terms of Spreads, Commissions, Leverage, etc. before making a decision. I personally chose Forex4You as they offer 400:1 leverage (unlike EU brokers that offer maximum 30:1) and I also like their trading platform. You may have other criteria when it comes to choosing a CFD broker, but if you are looking to trade during news time, Forex4You is actually a very good option due to their fast execution.

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When the Brexit vote was in, it so happened that I had entered a short position on SPY a few days prior. I had a thesis that it was overbought and due for a downdraft, although I was not thinking of Brexit specifically. The public overreacted (in my opinion) and SPY crashed, I was able to move fast and make out with like 10% gains over a few days which isn't bad for trading S&P. Too bad it amounted to a $50 gain in my Robinhood account. :)

So yes, average person can absolutely profit from unexpected world events. In fact, for a small investor, truly unexpected events are arguably a golden opportunity, because you don't have as big an information disadvantage vs big traders and institutions. Everyone is equally clueless when a true black swan shows up.

But truly unexpected world events are rare, and macro events generally can be very difficult to interpret in terms of a buy/sell signal. Especially without some very specialized education. And often, setting up an efficient position to take advantage of these requires instruments that are not practical for a small retail trader. So while I say it's possible, I'd also say that it's unlikely to be an effective main trading strategy. It's better to think of it as a sort of betting hobby, and use something more traditional for your actual investments.

As for Carl Icahn, he probably is such a big client that he can dictate all sorts of special arrangements with his broker(s) and do anything he wants. Market hours aren't a huge barrier to trading world events, you can just stick to events that are more conveniently timed than elections, and you can stick to strategies that give you more time to react than a few seconds. That said, if you really want to trade after hours, many brokers allow after hours trading even for smaller accounts. And you could always try trading crypto, which is open 24 hours and definitely reacts to world events (but good luck predicting how).

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In the UK there are spread betting firms (essentially financial bookmakers) that will take large bets 24x7. Plus, interbank forex is open 24x7 anyway. And there are a wide array of futures markets in different jurisdictions.

There are plenty of ways to find organizations who are willing to take the opposite position that you do, day or night, provided that you qualify.

protected by Community May 17 at 21:33

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