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Playing News
from:Playing news is what may be called a dirty trick in the stock market. The day traders indulge in it and it is their dominion.
We all know that the stock market is very sensitive to innumerable factors. It keeps fluctuating on any activity which is not even connected to it remotely. Two distant countries may not sign a treat and NASDAQ crashes! Such great is the unstable nature of the stock market! It is natural in such a scenario that there are always rumors floating regarding the performance, internal affairs of the companies, and government policies and so on by unscrupulous traders who take advantage of the ripples created by such rumors and make a quick profit.
The rumors may not match with what is apparent to the small trader but inspite of that. Sentiment plays a vital role and the trader falls for it. The price of the shares and the news regarding a share is directly connected. The price determines the nature of the news and the news affects the price of the shares, thus these two are interconnected.
The market and the industry analysis issue certain notifications which make and break many fortunes. The basic strategy followed by the day traders in most of the cases is buying stocks immediately after good news is announced and short selling immediately after a bad news is announced.
Many times the company plan on something important. For instance it mat decide on a major policy shift which is going to take place or a major financial decision is being taken which is going to affect the stock market greatly. The top level of the management knows the news but the public is not informed yet. The top level knows that the share prices will go up or fall down once the news is leaked. This is where they do some insider trading. They buy/sell according to news about to be made public and thus make a hefty profit. This type of playing news is illegal in the eyes of the law. At times the Market gets a whiff of the news and the market already starts moving in the anticipated direction. It is said that the news is already “priced in” and has already affected the stock price.
The day traders bank heavily on news playing aspect of the stock market and they buy and sell shares guided by these factors.
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