
Top Short Play: Blockchain Stock Investigated for Fraud
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The markets continue to gyrate: after modest losses during yesterday’s trading, stocks are posting a nice rally today. Megacap stocks like Alphabet and Microsoft are leading the way back up after falling victim to a broad tech-sector pullback in recent days.
News-based, quantitative trading strategies continue to beat the market, even in this chaotic environment. Why? Because these approaches are able to profit on both the upside and downside of major market trends.
Today’s Top Performer (a short play) is the perfect example. We featured Longfin back in December: it was shooting up as part of a general blockchain rally and gained over 100% in a single session after our news alert. In December, investors couldn’t get enough blockchain, and any related announcement seemed to precipitate profitable long action. Even fruit drink companies were getting in on the craze.
The environment for blockchain and cryptocurrencies has changed dramatically in the ensuing months. Rampant fraud and illegal-usage have driven numerous governments to begin leaning in on blockchain regulation efforts, with some states banning cryptocurrencies outright. Meanwhile, tech giants like Facebook and Google, also concerned with ICO frauds, banned crypto related advertisements.
And News Quantified users are profiting on the downside, too…
Today’s Top Short Play: Longfin Corp. (LFIN)
Blockchain Firm Plummets on Investigations, Russell De-Listing
This morning, news broke that the law firm Glancy Prongay & Murray LLP would be investigating Longfin on behalf of its investors. They are looking into whether Longfin violated Federal securities regulations. The company was recently de-listed from the Russell 2000 index after Citron Research found evidence of “filings and press releases…riddled with inaccuracies and fraud.”
Longfin’s stock NASDAQ:LFIN is, predictably, plummeting on the news. It sits down 48% at the time of this writing.
This episode is a powerful study in the value of news-driven trading approaches. News Quantified users were able to profit on the dramatic gains offered by the surge of interest in blockchain technology. And they were able to avoid exposure to much of the risk associated with this high-risk, high-reward sector. Now, they’re profiting on the downside risk.
These dynamics are especially apparent for sectors like blockchain. But they hold true for plays in every sector imaginable: news-based trading maximizes exposure to profitable price shifts while minimizing buy-and-hold risks. That’s why hedge funds have been employing similar strategies for decades.
In our free weekly training seminars for investors, we’ll discuss how to use news-based insight to beat market averages. And you’ll see how a platform like News Quantified makes these strategies more simple to execute than ever before. There’s still space left in our next session:
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