Trump threatened to destroy Iran's economy or eliminate its leadership if they don't strike a deal. The UN General Assembly is happening. Iran promised painful retaliation. Retail traders immediately opened their brokerage apps to figure out how to profit from World War III.
The technical setup here is f*cking pristine. Draw a line from the 1979 hostage crisis to the 2015 nuclear deal to today. Head and shoulders pattern. Neckline at regime change. Target price is either diplomacy or mushroom clouds. Your stop loss will not protect you.
Some guy in Michigan just put his entire Roth IRA into defense contractor call options because he read "retaliation" and thought it meant Raytheon goes up. He will lose everything by Thursday. Not because of geopolitics. Because implied volatility will crush him like a hydraulic press and he doesn't know what implied volatility means. He thinks it's a type of juice cleanse.
Iran vowed the response will be painful. Trump vowed the consequences will be severe. The UN will hold meetings where everyone agrees to disagree in seven languages. None of this matters to your portfolio. None of it ever did. The S&P 500 will close exactly where it opened because algos don't give a sh*t about your feelings or international law.
Diplomacy is complicated now, apparently. As if it was simple before. As if there was a golden age when nations resolved conflict through polite conversation and everyone went home happy. There wasn't. There never was. But retail keeps buying the dip on hope like it's a f*cking dividend stock.
The most predictable outcome is nothing happens and you spend six months watching pundits explain why nothing happening was actually the most significant something that could have happened. The second most predictable outcome is you lose money trying to trade it.
Photo by sina drakhshani on Unsplash
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