A nor'easter hit the Northeast this weekend. Coastal flooding occurred. Power went out. Tens of millions of people experienced rain and wind during a season when rain and wind typically happen.
Retail traders immediately began scanning their portfolios for exposure to utility stocks, generator manufacturers, and companies that sell flashlights. They consulted their technical indicators. They drew trendlines on charts of home improvement retailers. They convinced themselves this meteorological event, which occurs multiple times per year in this exact region, represented an actionable trading opportunity.
The storm was forecast. Everyone knew it was coming. The mid-Atlantic and New England prepared accordingly. But somewhere in a basement in New Jersey, a guy named Derek with three monitors and a Robinhood account refreshed his weather app forty times while simultaneously pulling up the five-minute chart for a regional insurance company he'd never heard of until seven minutes ago.
Power outages are temporary. Flooding recedes. Infrastructure gets repaired. None of this changes the fact that your stop-loss orders are still garbage and your understanding of implied volatility is somehow worse than your understanding of meteorology.
The nor'easter will pass. The damage will be assessed. Life will return to normal. Derek will still be underwater on his positions, but at least this time he can blame it on actual water.
Photo by Gavin Kelman on Unsplash
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