Trading shock waves

摘要

Risk management is a trader's best friend, and when it comes to event trading, it is his soul mate. Disasters typically happen unexpectedly: earthquakes, weather scares, political unrest and terrorist strikes, such as September 11, 2001. Some events have warnings, typically weather that can affect crops or pipelines,rnsuch as tornados, hurricanes, floods or drought. Some events are expected but not to the degree that they happen: Fed rate cuts. But no matter which type of news, a trader should always have a plan.rnIn this issue we have two long-time traders and educators providing insights on how to trade markets, either purposely looking for news, such as corporate events that causes stock drops or rises, or surprise announcements from the government. Tom Busby discusses "Five keys to surviving the news," (page 42), while Larry McMillan shows how using options can protect you in many ways in "Event trading with options," (page 38).