Black Swan

Discussion in 'Trading' started by jb514, May 8, 2011.

  1. jb514

    jb514

    What can you do after a black swan? Say it's 9:30 on September 17th, 2001, is it even possible to short indexes? It seems like it would be hard to set up any bearish position at market open.
     
  2. Leone

    Leone

    I think you have to know in advance
    Can you imagine not knowing and losing like 20 years of accumulated money. Eeek
     
  3. by sep17 the news is largely digested, so the indexes open very low. shorting at that point is risky because a reversal is very likely. going long maybe actually less risky but we are talking about a black swan so who knows.

    just pray you purchased enough puts ahead of time.
     
  4. dont worry about swans, but instead perfect your technical picture. the market had already given sell signals back in July of 2001, so 911 would represent a windfall, if anything.
     
  5. jb514

    jb514

    That is just a coincidence. What if the market had given buy signals in July?
     
  6. Five days after september 11, a giant hammer appeared on the daily chart and I bought call options. I sold a couple weeks later at a nice profit.

    In a fear based situation, it's important to recognise when all the fear is priced into the market. This is generally the low.