When Trump makes surprise announcements, traders pounce

Traders profit when prices jump up and down, and with his taste for cliffhangers, threats and policy reversals America’s first reality-TV president provides plenty of potentially market-moving content.

The reversals are especially profitable, allowing traders to win both ways — jumping ahead of stocks moving up or down to a post threatening something, then cashing out within thousands of a second, then betting the other way.

In addition to Trump, the service will include posts from other “high ranking” Truth Social contributors, including possibly his two oldest sons, Donald Jr. and Eric, who along with the father are heavily followed by users.

Truth Social has said that the information will be released to the traders and the general public at the same time so there really isn’t an issue of fairness. But Themis Trading’s Saluzzi, a critic of high speed trading, says that’s a red herring because when the posts are received, not when they are released, is what matters.

“Somebody who buys the info and has a system built to process it will be able to act quicker than you and me,” said Saluzzi, adding in reference to everyday, small stock buyers, “The loser is always the retail investor.”

Trump posts about a company he likes, and stocks jump

Aside from policy scoops, another reason to sign up has emerged in recent months: Trump is posting more about publicly traded companies, praising ones he likes in a way that sets off buying frenzies.

“The pimping of specific companies — obviously Wall Street would like to know that before other people,” said Dylan Hedler-Gaudette, a federal ethics rule expert at the watchdog Project on Government Oversight. “It’s a real mess.”

In April, moments after Trump praised Palantir Technologies in a post that included its stock symbol, the price briefly jumped the most it had in an entire year. Later that month, Trump posted, “Congratulations on Intel doing such a great job,” and the stock immediately jumped in after-hours trading.

Just which firms are signing up for the feed is unclear. Asked for comment, none of the half dozen most well known high-speed traders such as Citadel Securities and XTX Markets replied. If just three sign up for the $100,000 a month fee, that would double revenue at Trump Media, which reported taking in $3.7 million last year.

Trump Media needs big money customers

The company can use their business.

Stock in the Truth Social parent has plunged 75% since Trump took office last year as the company keeps reporting hundreds of millions in losses despite the president’s help driving traffic to its site by posting major decisions there.

In fact, the president breaks news on Truth Social so often that the White House press office will copy his posts into an email when responding to questions from the media seeking details on policies. If his posts aren’t available yet, journalists are sometimes told, “Wait for the Truth.”

Another problem for Truth Social is looming if the Democrats take control of Congress and launch investigations, as vowed by Massachusetts Senator Sen. Elizabeth Warren in a statement Friday specifically attacking the new service: “We will haul in those responsible for this open corruption to answer to the American people.”

If the losses keep mounting for the company, though, some predict the president will push things further, using the platform even more for policy announcements.

“That’s absolutely going to happen,” warns Craig Holman, a lobbyist for the good government group Public Citizen. “Trump knows how to sell products.”

—-

AP reporters Will Weissert and Josh Boak contributed from Washington.

Bernard Condon And Brian Slodysko, The Associated Press