No matter if you’re a short-term trader or a long-term investor, your goal is to profit from events that move a stock, hopefully upward, unless you’re short. Event-driven traders focus on this aspect of investing, identifying stock mispricing and upcoming corporate events that may trigger short-term price action, including post-event corrections. Here are some of the things an event-driven trader should look out for.
- Corporate Events
- Macroeconomic Events
- Risks to Avoid
Corporate Events
As you might expect, corporate events are the first and most regular events that traders look out for. All kinds of traders track them, since they indicate the health and progress of a company. While fundamentals typically drive medium- to long-term price action, these events can also drive sharp, swinging price action to the upside or downside.
Stock buyers hope for the former, while derivative traders can profit from a stock price taking a tumble. For example, CFD traders can sell a stock, going short on its price and profiting from every tick downward before exiting. To do so, many use a specialized
<p>Corporations in the market don’t exist in a vacuum. They are part of a wider market that, for good or ill, can swing its price action without any corporate event occurring. The most obvious ones here are the regular adjustments to government monetary policy, and particularly those of the Federal Reserve since
