Day Trading > News Playing

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News Playing

Playing news is primarily the realm of the day trader. The basic strategy is to buy a stock which has just announced good news, or short sell on bad news. Such events provide enormous volatility in a stock and therefore the greatest chance for quick profits (or losses). Determining whether news is "good" or "bad" must be determined by the price action of the stock, because the market reaction may not match the tone of the news itself. The most common cause for this is when rumors or estimates of the event (like those issued by market and industry analysts) were already circulated before the official release, and prices have already moved in anticipation--the news is already priced in the stock.



Last Updated: 29.06.2008

This article is licensed under the GNU Free Documentation License. It uses material from the Wikipedia article Day Trading.

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