$2B In Profit For Swamp Trader: Suspicious Trades Identified Before Trump’s Market-Moving Tweets

$2B In Profit For Swamp Trader: Suspicious Trades Identified Before Trump’s Market-Moving Tweets

market-moving tweets
Stocks traded shortly before Trump’s market-moving tweets make some traders wealthy and raise questions about insider trading. Trump chats with Chinese President Xi Jinping during a welcome ceremony at the Great Hall of the People in Beijing, Nov. 9, 2017, file photo. (AP Photo/Andy Wong, File)

Stocks that were traded with precision timing shortly before market-moving tweets by the commander-in-chief have made several traders or trader groups enormously wealthy and raised questions about insider trading.

These traders may be incredibly lucky. However, they may also have access to information that other people don’t have about, say, Trump’s or China’s latest thinking on the trade war, Vanity Fair reported. Trump is able to move the markets through his tweets — that’s common knowledge.

When news about a potential resolution seems positive, stock markets go up. When the news about the trade war appears negative, they go down.

Here are a few examples of mindblowing trades made shortly before Trump made market-moving tweets and announcements:

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  • On Thursday, June 27, the S&P 500 index was at about 2915. In the last 30 minutes of trading on June 28, someone bought 420,000 September e-minis — electronically traded futures contracts that are a fraction of the value of a corresponding standard futures contract. Soon after, Trump announced that trade talks were “back on track.” The following week was a good one in the stock market, thanks to the Trump announcement. It gained 84 points, or $4,200 per e-mini contract. Whoever bought the 420,000 e-minis on June 28 made almost $1.8 billion in profit.
  • In the last 10 minutes of trading on Aug. 23, markets were in turmoil over bad trade news. Someone bought 386,000 September e-minis. Three days later, Trump lied about getting a call from China to restart the trade talks, Vanity Fair reported. The S&P 500 index went up nearly 80 points. The potential profit on the trade was more than $1.5 billion.
  • In the last 10 minutes of trading at the Chicago Mercantile Exchange on Friday, Sept. 13, someone sold short 120,000 S&P e-minis when the index was trading around 3010. A few hours later, drones attacked a Saudi oil infrastructure. Oil prices went up and production suffered. When the CME next opened for pretrading, the S&P index was down 30 points, giving that trader or group a $180-million profit.

Regulators know or can find out who is making the trades, according to Vanity Fair. One longtime CME trader said he hasn’t seen anything like these trades since al-Qaida cashed in before the September 11 attacks. “There is definite hanky-panky going on, to the world’s financial markets’ detriment,” he said. “This is abysmal.”

Regulators say they watch out for big trades like these. But when Vanity Fair reached out to them, the Securities and Exchange Commission declined to comment. The Commodity Futures Trading Commission did not respond and a spokeswoman for the Chicago Mercantile Exchange said the trades in question did not originate from a single source and were of no concern.

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In late August, Trump was desperate to reignite trade talks with China and boasted during the G7 summit that China was back the table. “We’ve gotten two calls—very, very good calls,” he told reporters. The market rose more than 900 points in the next few days. However a Chinese spokesperson denied the existence of the calls in the days leading up to the G7. Two U.S government officials later told CNN that Trump, “eager to project optimism that might boost markets,” had misspoken and “conflated” stuff.

That single Trump lie briefly inflated domestic markets by hundreds of billions of dollars, Vanity Fair reported. “What this describes is, quite literally, market manipulation that constitutes criminal violations of the Securities Exchange Act of 1934,” tweeted George Conway, a conservative attorney and Trump critic.