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Stock Exchange: Can We Trade Geopolitical Risk?

Jeff Miller profile picture
Jeff Miller


  • The headlines are full of geopolitics - even more than usual.
  • Many believe that these problems are important market risks.
  • Is this true? Is there a way for traders to exploit the volatility?
  • Our models have a few interesting choices.
  • The best trading strategy is not obvious!

Our Stock Exchange is all about trading. Each week we do the following:

  • Discuss an important issue for traders;
  • highlight several technical trading methods - including current ideas;
  • feature advice from top traders and writers; and
  • provide a few (minority) reactions from fundamental analysts.

We also have some fun. We welcome comments, links, and ideas to help us improve this resource for traders.


Our last Stock Exchange took up the trend toward evidence-based trading. If you missed it, check back to see what evidence you should be using and how to acquire it. Dr. Brett has added another post and a valuable link on this topic.

This Week - How Can We Trade the Known Geopolitical Risks?

This important topic is in the headlines. The G20 meetings, the Trump/Putin session, and North Korea’s missile tests are all front-page news. What does it mean for traders?

Trading Tips

  • Dr. Brett Steenbarger is coming to Chicago for a trading workshop. If you have never seen him in person, this is a special opportunity. If you have seen him before, you already know you will enjoy a repeat. One of his topics will be personal awareness and states. This is the key to accessing your peak potential and avoiding your greatest weaknesses.
  • Capital Market Laboratories suggests how to take advantage of volatility with options. One caveat: You need to have some idea of when the volatility is coming. In some stocks, the potential earnings moves are not fully reflected in option pricing. On geopolitical risks, finding a date certain might be a problem.
  • Cornell University Professor Eswar Prasad, an economist with special credentials on trade policy, sees both protectionism and cyberattacks as underpriced risks. He cites next year as the time of peak concern. It is a good article to read, but finding

This article was written by

Jeff Miller profile picture
Seeking Alpha mourns the passing of Jeff Miller, on May 7, 2021. During his time at Seeking Alpha, Jeff attracted a following of close to 40,000 readers and published more than 1,500 articles. He was a portfolio manager at Incline Investment Advisors, LLC. Jeff also was President of NewArc Investments, Inc., and served as a university professor.....................................................................................................................................Jeff is Portfolio Manager for Incline Investment Advisors, LLC.,manager of both individual and institutional investments. A registered investment advisor, he was formerly President of NewArc Investments, Inc. Jeff is a former college professor with a hands-on, real world attitude. His quantitative modeling helped inform state and local officials in Wisconsin for more than a decade. A Public Policy analyst, he taught advanced research methods at the University of Wisconsin, and analyzed many issues related to state tax policy. Jeff began in the financial business as Research Director for a trading firm at the Chicago Board Options Exchange. He investigated anomalies in the standard option pricing models, taught classes for beginning options traders, and developed new forecasting techniques. In 1991 he established a general research consultancy, working with professional traders at all of the Chicago financial exchanges. In 1998 he started NewArc Investments, Inc. Jeff has a commitment to the specific needs of individual investors. It is not a one-size-fits all approach, but one that emphasizes the unique circumstances of each client. Jeff also serves on the board of a small technology company. He occasionally serves as an expert witness in legal cases involving financial markets and hedging.

Analyst’s Disclosure: I am/we are long ADM, VRX, ALGN. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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