How easyMarkets Traders Can Prepare for Trump’s Inauguration
19 January 2017
On Friday, Donald Trump will be officially sworn is as the 45th President of the United States. Experts believe it may be a highly volatile event, with some forecasting a “buy the rumour, sell the fact” phenomenon in the markets. For those keeping track, the market already bought the rumour after the November 8 election. That means this Friday may be the time we “sell the fact,” especially as US and global equities near a short-term top.
Luckily, easyMarkets traders have a powerful weapon at their disposal to ensure they don’t let Trump’s big day end up in a margin call on their account. That weapon is dealCancellation, a tool exclusive to easyMarkets that allows traders to cancel a losing position within 60 minutes and have any losses returned to their account. It really is that simple. For a small fee, click to enable dealCancellation on your forex or commodity trade and have that trade protected for up to 60 minutes. If you lose money within that timeframe, simple cancel the deal to have your funds returned.
Traders looking to pre-empt possible volatility on Friday should keep track of the day’s events. Below is a brief timeline to get you ready for Trump’s big moment.
Friday morning: The news wire may be very chatty in the wee hours, as Donald Trump, soon-to-be Vice President Mike Pence and their families attend services at St. John’s Episcopal Church, which is not too far from the White House. After that, President Barack Obama and First Lady Michelle Obama will welcome the President-elect and wife Melania Trump to the White House. They will then travel together to the Capitol via motorcade. Times shown are EST.
9:30 am: The official inauguration ceremony begins. Washington’s top brass will be in attendance.
11:30 am: Opening remarks from religious leaders will commence. Vice President Pence will be sworn in by Supreme Court Justice Clarence Thomas.
Noon: Under the administration of US Supreme Court Chief Justice John Roberts, Trump will recite the oath of office while holding his hand on the inauguration Bible, as well as the Bible his mother gave to him in 1955. He will then deliver his highly anticipated inaugural address.[1]
While the day certainly doesn’t end there, traders may have seen all they needed to see, as Trump’s inauguration speech is the highlight of the day. Bullish traders may be looking for any clues about Trump’s economic and fiscal priorities. After all, the promise of a booming economy via fiscal stimulus, corporate tax cuts and regulatory reform were the main catalysts behind the two-month long rally in US and global stocks. Without these promises, there’s not much reason for the market to continue higher.
Bearish traders may be looking for Trump to be completely silent on these matters, as he was during his first news conference since being elected president.
The great news is easyMarkets traders have plenty of options to either hedge against volatility or play to its advantages. If you think volatility will rise during inauguration, the CBOE VIX Volatility Index (VXX) may provide huge short-term upside. On the easyMarkets platform, VXX is available under the ticker name FEAR. The so-called “fear index” typically moves in the opposite direction of S&P 500 Index options prices, giving you a quick and easy way to navigate volatility. If volatility rises, expect the S&P 500 to decline. If the S&P 500 rises, expect the FEAR index to drop.
Other practical tools to consider for inauguration day are stop-loss and take-profit orders, both of which are offered on the easyMarkets platform. Traders also have the peace of mind knowing they have guaranteed negative balance protection and guaranteed stop-loss. On top of that, dealCancellation is there to offer a truly risk-free trading environment come Friday.
Friday may be a crazy day in the market, but easyMarkets traders have the tools to keep risk at bay. Don’t forget to follow the economic calendar leading up to the event for other potential market-moving events. Happy trading and good luck!
[1] AFP (January 17, 2017). “Schedule of events for Trump’s inauguration.” Yahoo! News.
