With near 24-hour access, 6 days a week, futures are a preferred vehicle for trading potentially opportunistic news & events. Whether you trade commodities like gold or oil, or equity indexes like E-minis, futures markets are extremely liquid and offer round-the-clock access for traders.
If you are looking for an ideal tool to trade news & events, including the upcoming US Presidential election, look no further than the futures market.
See why futures are ideal for trading news & events in this 3-minute video:
News Can Hit at Any Time
Because futures trade nearly 24 hours a day, you can act on global news events as they develop, adjusting market exposure instead of missing out and watching from the sidelines.
For example, if you trade stocks and an influential event occurs during the European or Asian sessions, you would have to wait until the next day to participate in that price action. In many cases, including the example below, much of the large price swings and trade opportunities occur before the US open. With futures, you can manage positions any time of day and react to news as it unfolds.
What Happened in 2016?
Of the 5.3 million E-mini S&P 500 futures contracts traded on November 9, 2016, more than 50% of those trades took place before the US market open during the Asian & European sessions.
Taking a closer look at a 15-minute interval, we see that most of the price action also took place before the US session started. As election results were announced throughout the trading day, E-mini traders saw a sharp 5% drop followed by a recovery and eventual gain of 1% at the close. As you can see from the chart below, most of this price movement took place during the Asian and European sessions.
Stock & ETF traders were unable to take part in the majority of the 2016 election move. Futures traders on the other hand were ready and willing to speculate the action, clocking in more than 5 million contracts in volume and $264B in notional value, more than 37 times the liquidity traded via S&P 500-based ETFs and cash constituents.
Next week’s US Presidential election could see a similar move. For traders & investors eager to trade and hedge the price action, futures are the best tool to trade news & events.
Those planning to trade during and following the US Presidential election should have a clear and focused risk management strategy in case of unexpected developments.
Get Started with NinjaTrader
NinjaTrader supports more than 100,000 traders worldwide with a powerful & user-friendly trading platform, deep discount commissions and world class support. NinjaTrader is always free to use for advanced charting, strategy backtesting and an immersive sim trading experience.
Download NinjaTrader’s award-winning trading platform & get started with a free trading demo today!
This article is intended for educational and informational purposes only and should not be viewed as a solicitation or recommendation of any product, service or trading strategy. It includes content from independent persons or companies that are in no manner affiliated with NinjaTrader Group (NTG) or any if its affiliates. The content and opinions expressed in this article do not necessarily reflect the official policy or position of NinjaTrader or any of its affiliates.