Trump says the U.S. will keep talking to Iran. This comes after a ceasefire signed last month collapsed when both sides spent this week attacking each other. The ceasefire lasted approximately three weeks. For context, that's shorter than most celebrity engagements.
Retail traders immediately tried to position themselves for this development. They bought defense stocks on Tuesday. Sold them Wednesday. Bought oil futures Thursday. Closed those positions Friday morning at a loss. One guy on Reddit claimed he was "hedging geopolitical risk" by buying calls on a bankrupt drone manufacturer. He lost $4,700.
The talks will continue despite the fact that talks clearly don't work. This is the diplomatic equivalent of your friend saying he'll definitely pay you back this time. He won't. Everyone knows he won't. But you nod and say sure because what else are you going to do.
Iran and the U.S. exchanged attacks for consecutive days. Then both sides agreed to keep negotiating. This is like getting into a fistfight at Thanksgiving dinner and then sitting back down to finish the turkey. Except the turkey is Middle Eastern oil supply and your drunk uncle is holding a nuclear program.
Day traders treated this as a buying opportunity. They weren't sure what to buy. They just knew they had to buy something. Anything. The headline had the word "Iran" in it and that felt important. So they panic-bought whatever their favorite FinTwit dipsh*t told them to. Most of them bought shares of companies that don't operate anywhere near Iran. One guy bought stock in Iranian Airlines. It doesn't trade on U.S. exchanges. He bought a penny stock with a similar name and convinced himself it was a 4D chess move.
The ceasefire failed but talks continue, which means absolutely nothing will change except the number of press conferences where officials say they remain committed to dialogue while actively shooting at each other.
Photo by Saifee Art on Unsplash
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