The Mystery of the Trump Chaos Trades, Iran/Mar-a-Lago Edition – By William D. Cohan (Vanity Fair) / Jan 9 2020
Spikes in the Chicago E-mini market, and in defense stocks, preceded the announcement of the killing of Qasem Soleimani, not long after Trump reportedly told Mar-a-Lago guests he was working on a “big” response to Iran’s provocations. A coincidence?
Back in July, when I first wrote about suspicious trading in a futures contract tied to the performance of the S&P 500 index, there was nary a peep. Maybe everyone was at the beach? Then, in October, I wrote a second story about the trading in these same futures contracts, known as e-minis, and about how it sure seemed like some people who were placing the bets on them at the Chicago Mercantile Exchange were benefitting from exquisite timing, (or something more nefarious) putting themselves in a position to reap millions of dollars in profit, assuming they sold when their future contracts were in the money.
This time, the crowd went wild. My tweet about the story garnered nearly 1 million “impressions” and more than 100,000 “total engagements,” which for someone with around 11,000 followers seemed pretty remarkable. Two congressmen asked the FBI, the Securities and Exchange Commission, and the Commodity Futures Trading Commission to investigate the suspicious trading; a group of Democratic senators also asked for an investigation. Predictably, the CEO of Chicago Mercantile Exchange said there was nothing suspicious going on. These were not the droids you were looking for. There were a bunch of critics, eager to bat down the story. And then Bloomberg reported that the investigators found nothing suspicious either. But my sources remained convinced that the trades were suspect.
Then came the U.S. drone strike that killed Qasem Soleimani at around 1 a.m. local time in Baghdad on Friday, January 3. That was around 5 p.m. in Washington. It took the Pentagon another five hours or so—just before 10 p.m.—before it released its official statement telling the world that Soleimani had been killed. E-minis stop trading on the CME atabout 4 p.m. New York time (3 p.m. Chicago time) each day. There is then an hour of what’s known as aftermarket trading. Then there is a one-hour break in trading. Night trading in E-minis begins at 6 p.m. New York time, hours before the Pentagon made its official announcement about Soleimani’s killing. For the first two and a half hours of the night trading on January 2, the volume in the E-mini market was around 1,000 contracts every 10 minutes, according to the trading records from that night made available to me. Nothing particularly remarkable.
Continue to article: https://www.vanityfair.com/news/2020/01/the-mystery-of-the-trump-chaos-trades-iranmar-a-lago-edition
