Trading Strategies: The Global Impact of the G-20 Summit - TheStreet

Trading Strategies: The Global Impact of the G-20 Summit

Here's what you need to know after the world leaders return back to their home countries.
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The G-20 summit is over, so now what?

TheStreet's London Bureau Chief, Martin Baccardax, breaks down what investors should keep their eyes on after the G-20 Summit wraps up.

TheStreet's Jacob Sonenshine did a preview of the summit.

"Some people are going to be hedging positions to protect themselves from the downside if there is no positive conclusion from those talks," Chris Larkin, svp of trading at E*Trade told TheStreet. "People are making strategic decisions for a short period of time using the options market."

The G20 summit will be held in Bueno Aires. It will begin Friday evening Nov. 30 and end on Saturday Dec 1. Trump and Xi are expected to meet separately on Saturday to discuss U.S. and Chinese trade relations.

The S&P 500 is up 3.86% in the past five days, with the Dow Jones Industrial Average up 3.68% in that span. The market rallied Wednesday after Federal Reserve Chairman Jerome Powell came off as more dovish than expected, leading many investors to prepare for bad news after Presidents Trump and Xi Jinping meet. There are strong volumes of options trading, as investors are "putting up less capital to make certain directional bets," Larkin said, implying there could be healthy demand for call options, as investors don't want to commit too much capital ahead of the meeting.

There is growing uncertainty about trade progress. "There's certainly no guarantee that this is going to work," Craig Allen, president of the U.S. China Business Council told TheStreet.

"The best I can come out with is a 50-50 that we will have some form of a high-level agreement for a stand still of tariffs for progress," Allen said. So, even if there's progress on the intention to work collaboratively, the issues "can't be solved over dinner." Meanwhile, Trump indicated he may continue to play hard ball, saying earlier this week: "The only deal would be, China has to open up their country to competition from the United States."