Playing the Fed Just Like Earnings

In know that Doug Kass is net short going into the Fed meeting tomorrow and while I expect volatility, the market direction is anyone's guess. In hindsight, waiting until the Fed was ready to announce may have been the way to play the short side since this market is showing no sign of weakness today, though the buying has been slow but persistent.

This is where I have a different view, though. I believe that if you are going to game an event, then game the event, not the pregame. It's the same theory I use on earnings trades. Though I may sketch out a thesis early in the day, I don't want to put on the trade until later in the day if my thesis is to be involved through the announcement. That's very different than trying to play a rising implied volatility or something like that into the announcement and being out before the announcement. The risk of a move before the event is real. It can create a scenario where even though you are right in the end, you may not make any money on the trade thesis because you are too far underwater by the time the event occurs....201 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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