No. 3 - IRAN RUMOR FUELS OIL SPIKE: Trading Speculation
For a little while this afternoon, the oil pits at the Nymex were in a frenzy. The rumor of Iran firing on a U.S. naval ship was spreading yet no one seemed to be able to verify them. Crude oil prices were skyrocketing, finally hitting $68 before leveling off. The Navy denied the story but by then it was already apparent what a single, unsubstantied rumor could do to the oil markets. How do the traders get their information - and when they do, how they separate rumors from fact and trade appropriately?
Eric Bolling says, as a commodities trader, he has access to different conduits of information than a regular person or even a regular investor. Today, the first thing he did after seeing the price spike was call the orders desk, which is in touch with traders around the world. They didn't have any information so he then called a fellow trader in Houston who told him about the rumor. But for all the people out there who don't have a commodities trader on their speed dial, there are other ways to access information and check the facts quickly enough to beat the market.
Tim Strazzini says the Internet and television remain the fastest way for laypeople to access news and information. On the web, blogs are often the first to break a news story - even before wire services like the Associated Press and Reuters get a hold of it - especially when it comes to geopolitical events. However, with blogs and the web there is always a greater chance that the information could be flawed. T.V. news provides fast information as well, he says, but tends to stick to fact-checkable items such as corporate events. When it comes down to it, Tim says, "the fastest way to know you just missed something is to look at the price action."
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On MAR 27, 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders:
Strazzini Owns (MO), (T), (VZ), (WMT), Owns Puts in (EEM), is Short Puts in (AUY). Bolling Owns (ICE), (NMX), Natural Gas, Gold, Silver, Soybeans is Short Corn. Macke writes for Minyanville.com