Is Trump Profiting from Inside Information?
$920 million worth of crude oil shorts were taken 70 minutes before an Axios report claimed the US and Iran were near a “14-point” deal to end the war.
At 3:40 AM ET today, nearly 10,000 contracts worth of crude oil shorts were taken without any major news.
This is equivalent to ~$920 million in notional value, an unusually large trade for 3:40 AM ET.
At 4:50 AM ET, just 70 minutes later, Axios reported that the US is “close” to a “memorandum of understanding” to end the Iran War.
By 7:00 AM ET, oil prices had fallen over -12% with these crude oil shorts gaining approximately +$125 million.
What just happened? [It seems clear enough that insiders or their agents shorted oil futures one hour and ten minutes prior to planting a story on Axios that Trump and Iran were about to end the war. This fabricated good news sent oil price down. Insiders were able to replace at a lower price the oil futures they had sold and the insider trading produced large profits. Those with inside information on key price movements or Federal Reserve policy make easy money. Remember the money made by undisclosed parties who shorted airline stocks just before reports that airliners had flown into the twin towers on 9/11.]
https://www.unz.com/runz/will-america-be-expelled-from-the-middle-east/
According to the Daily Beast, this was merely the latest example of such massive profit taking due to possible advance knowledge of Trump’s announcements of dubious peace proposals:
At least four traders made a combined $2.6 billion in the oil market by wagering that oil prices would drop shortly before Trump made major moves, according to trade data from the London Stock Exchange Group shared with ABC News.
As Kevin Barrett noted, these suspected insider trades took place on March 23, April 7, April 16, April 21, and then again last Wednesday, May 6.
Although the Iranians soon explained that they weren’t actively negotiating with the Americans and they ridiculed the media reports that a peace agreement might be imminent, oil prices still sharply fell and stayed down, which seemed totally irrational.
After so many false reports of a peace agreement being almost at hand and the strait about to be reopened, I found it difficult to believe that even the most gullible optimistic trader would accept these statements at face value, let alone that there were enough of those traders to move the markets in such dramatic fashion.
Perhaps it wasn’t insider trading after all, and the solution to this mystery was that these major market movements were actually due to trading by AI systems, which made their decisions mostly based upon how they expected all the other AI trading systems would react to Trump’s statements. A shrewd observer had suggested this possibility last month:
An offhand comment the other night by an MSNow commentator gives us the first insight. He mentioned that a lot of trading isn’t being done by humans but by algorithms that search the news and what’s trending on the web for clues about how the market will move the next day. So when Trump Truths that the war with Iran is over — they’re opening the strait and have agreed to all his terms and are becoming the 51st state — the algorithm doesn’t need to believe him. It just needs to see that true or not, this statement will move stocks up and oil down. With so much trading done by algorithms, each algorithm knows stocks will rise because the other algorithms will move them.
With 70% of daily trading done by algorithms, humans have become largely irrelevant to the stock market. So it isn’t people at all moving the market.
https://www.unz.com/runz/will-america-be-expelled-from-the-middle-east/