Who Struck It Rich in the Markets When Trump Postponed Bombing Iran?
A series of uncannily timed bets on the price of oil and stocks deserves a proper investigation. It’s far from clear that they’ll get one.
By John Cassidy
Source photograph by Michael Nagle / Bloomberg / Getty
Last weekend, Donald Trump threatened to “obliterate” Iran’s power plants if the Tehran regime didn’t open the Strait of Hormuz. Oil prices, which were already elevated, rose further. On Monday, March 23rd, at 6:49 A.M. Eastern Standard Time, there was a sudden surge of trading in the futures markets, which operate around the clock. According to the Financial Times, roughly six thousand oil-trading contracts, worth more than half a billion dollars, changed hands. Just after, there was a surge of activity in contracts tied to the S. & P. 500 stock index, which had been on a downward trend since the war began.
The spikes in volume didn’t indicate whether the trades were buy or sell orders, but based on how prices moved as they were placed other traders quickly deduced that someone was selling oil futures, a bet on the value of the commodity falling, and buying stock futures, a bet on a market rebound. Then, shortly after 7 A.M., the President announced on his social-media account that the United States and Tehran were engaged in talks about a “COMPLETE AND TOTAL RESOLUTION OF OUR HOSTILITIES IN THE MIDDLE EAST.” Trump said that he had instructed the Pentagon to postpone any strikes for five days. The market’s reaction was immediate. The price of crude plunged by more than ten per cent. Stock futures jumped about 2.5 per cent.
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