Brushing Off News

So yesterday was the address to the union, where Trump said there was a 2-3 weeks left for resolution between Iran and the US. At the same time, he did say the market was gonna go green, but highlighted that the oil prices need to rise first before this happens.

I think people may have panicked overnight and sold during closed hours. Last night we saw SPY, DJI, and Citigroup drop in price, but SPY and DJI were severely affected by it. This morning, during the first hour, we saw the effects of last night's news take place.

In the above, I've highlighted the first hour, were we see the significant drop from yesterday's closing to this morning's opening. A sharp drop of ~$4 for Citigroup. However, at the same time, we see that after 10:30 this morning, it regained stabilization, and while it fought at the $114 the entire day, it closed t $115.25

So I broke one of my rules and placed a contract order ahead of opening hours. I did this because I felt conviction in the price dropping this morning. It was real, the drop is evident in the chart above. I initiated a contract for $0.97 for a strike price of $108 though given that the drop was quick and drastic, my order didn't fill. I then re-placed the order with the price available $1.66 per share.

Now, I didn't do any set ups, I didn't look at anything, and I didn't wait out the first hour of trading, which I typically do. So, while my new contract began accruing gains. after the 10:30 am mark, it began to drop as the price of Citigroup continued to rise. I wasn't as upset, I walked into this contract with zero preparation other than the news from the previous night. Additionally, given that it is my first put ever, I knew that I could lose all of my initial investment for this. I wonder if accepting defeat ahead of time affected this in some way. Either way $1.66 per contract is my premium for this lesson.

It's night time, but I didn't exit my contract. I wanted to see it play out on Monday. We have two big inflation reports next week, and while we can stipulate that inflation remains high, the announcement of end of resolution can trigger buying now. Who really knows.

I am riding this wave, mostly for the learning and less the profit for this. It was interesting to see the market shaking off the news yesterday. The market pretty much said to the investors and traders to ignore the outside noise. The market is closed tomorrow and the weekend, which means there isn't anything exciting for the market.

This weekend I want to nail the difference between buy put vv sell put.