Where It Began: Liberation Day Fallout, Part IV – Prelude
A Young News Trading Specialist Navigates The Day That Started It All.
Read Part I: (Monday 7 April Trading Action)
Read Part II: (Tuesday 8 April Trading Action)
Read Part III: (Wednesday 9 April Trading Action)
Across the AXIA trading desks.
Wednesday 2 April 2025.
London, England.
But they wait and wait and… wait. In the lead-up to the Wednesday 2nd April ‘Liberation Day’ announcement, or any big day, you won’t forget the pains—whatIcould’amade!—but will forget the tedium. Really now! Would it not be respectable, feasible, guaranteed there would be a leak, or headline or… something? Monday news? Nope. Tuesday source? Neither.
The traders are here on Wednesday, April 2nd, on the first floor in London, waiting for the evening announcement. They are cautious—hyped, indeed—yet concerned about the chances one is afforded to do absolute ring, as they say. With the entire market hanging on today’s event, the focus and attention and the way the markets have traded on the possibility of resetting global trade entirely, with whoinnameachrist knows what second and third order effects?
When will the market decide to look forward, very forward, or only to the next day? To be as optimistic as a 30-year bond one moment, and as pessimistic as a 2-year note the next. Or the other way around? For these relatively risk-seeking traders who refuse to downplay events, caution is a priority. But then the E.U. session comes and goes; it’s quiet on the news flow. What are we expecting? A 20% universal tariff? Targeted reciprocal, or bucketed?
“The most impressive thing about today,” this young trader says, “is how the hell we haven’t had any sources!” We’ve met him before; this curly dark-haired, deep-voiced, freckled young trader has made his bones as a news trading specialist, hitting his first seven-figure year in 2022. He continues, that Trump is probably going to come out and ad-lib the thing live. He’s worked through seventeen variations of how, when, what the headlines will be, and what he’d do: what markets, what size, and the sequence of it all. And he’s primed: the momentum in his career, from account growth to skill development, the confluence of the market story, and his story—about as wide as the tip of a pencil—could synchronise. That’s how it is: the trader is always made in the next cycle, and he’s been building the bullets...
Plan adjustment: With 9 p.m. nearing in London, the markets are thin as the U.S. and E.U. cash sessions have closed, and E.U. equity futures shut. So the choice is made. Trade S&P futures out of all equities and focus on one Treasury. The 5-Year is our trader’s usual go-to. Short end is driving the market moves at the moment. So—it’s the 2-Year or 5-Year—but the twos’ caught up in the 2s10s and other spreads messing about. Fives’ is easier. If things went well, our trader would hit Gold, Euro, and maybe some Canadian dollar futures.
There is a relative consensus on potential outcomes, but divided on the details. Our trader sees the markets expect 15-20% universal tariffs. The equities’ resilience suggests they expect Trump to back down, and we’ll bid once more at curtain close. So: a 10% universal tariff is relatively dovish, yet 20% is hawkish; markets will move accordingly. But 10-to-15%? What we doing with that… What if he exempts this… You’ve got to decide how to act on these market pricing details, our trader said later, as the day is often decided on the minutiae. Hence, the imperative is persistent and deep immersion with market flows, pricing, and news flow.
“Ladies and gentlemen, the President of the United States!”
a voice blares from the speakers. Fanfare, fanfare! Prez T comes out, shakes someone’s hand, and starts speaking; the markets roll, dip and ping around, but there’s no real commitment or sustained flow. He goes on and on… Jesus man, say it! It was here, in the Rose Garden, where Trump sanctioned China in July 2020 over its interference with Hong Kong’s autonomy, our trader remembers, and everyone expected tariffs, which didn’t happen. The pattern? Chop-chop-chop—then the big, real move. Because Trump likes his preamble: “J.D., thank you, thank you—where are you, J.D.?” It’s all déjà vu: the Rose Garden again, the preamble and this damn death chop! Even if you smash the real move, you often make back only what you lost in the chop, so went the lesson for our trader, merely a year or so into his career.
This time, he’s staying out of it—chopchopchop go the markets. Yet, our trader cranes over his keyboard; leaning forward from his chair, his face closer to the screens: symptomatic of getting glued to the Spoo. What’s it trying to do? Where’s Trump leading us? Maybe… if it blips up on nothing, I could sell it for a downside move if he’s not said anything. The markets hang on the President’s word, some traders hit various markets mid-sentence, front-running the traders hitting the end of the sentence. You never know… says the trader who just pinged the S&P. But our trader is still waiting.
Then!—one of his screens with a little box where headlines drop down flashes. He glances and shouts to the floor, “ten percent universal tariff!”
———Instantly! Lift the S&P, hit the 5-Year, hit Gold!——
——Holy Shi-HolySh—You have to be in this! This is huge! Lift the Spoos! Need to be in it! clickclickclick—— the price ladders are screaming; max speed!——
——“Ten percent tariff!—ten percent!—ten percent!” the traders shout over the alerts and Trump’s speech at full blast. Huge—this is big mate! The move was so fast that as our trader tried to lift 240 lots, one of his big clips got left behind; down below as a limit order, he got the other 160 lots at-market. He was already in another 300-or-so lots in the 5-Year and 30 in Gold.
The S&P, the ol’Spoo, practically teleports higher as the 5-Year and Gold futures collapse. Get the charts! Shit! Spoos is there. Our trader starts to scale out his S&P as it hits some pre-drawn levels; the markets are so thin they can snap back further. Clickclickclick—outoutout—he scales out of S&P and the 5 Year; then sold Gold again. But this time he went offside. That’s weird… he sells more, but Gold bids against him. This will get messy…
In the background, Trump is still going on about… something. But none of this flow came from him. Somewhere, in between all of this, the headlines were attributed to the Wall Street Journal through the newswires while Trump was speaking live. ‘U.S. To Impose 10% Across-The-Board Tariff on All Imports, President Trump Says—WSJ’ was the first headline, which, combined with the two other headlines, meant it would be a large step down from this financial, economic saber-rattling. So: good news! Buy S&P! And another good reason to start getting out of positions, our trader thought, as nothing has happened, and Trump is still a few phrases away from your best or worst trading day. Eventually, our trader gave up his Gold position, a relatively small loser. Anyway, the order book was too thin to trade with any meaningful size. Now, Trump is talking specifics on tariffs and rates…
Now he’s mentioned China!... the rate they’ve escalated, and how the U.S. would charge them half. That doesn’t make sense. Trump keeps saying reciprocal, but WSJ said they are doing a universal tariff…
The Little Big Chart
“Could you bring it out, Howard?”
About twenty minutes into the announcement, Commerce Sec Lutnik brings over an official-looking board and hands it to our main man.
“If you look at that—China, first row,” Trump continues, “China: sixty-seven percent... so we’re going to be charging a reciprocal tariff of thirty-four percent.” 34! Not 10, 15, 20—this is way above the most hawkish expectations! 20% was the worst case, and we traded on the good, dovish case—now suddenly we have to price the extra-worst scenario? And for each country? Look at the list! The plot twist is here. “So how can anybody be upset?” continues Trump.
Instantly! Our trader hits the S&P bids with a full clip and lifts three big clips in the 5-Year—mate, this is crazy! After we traded on the dovish, now invalidated headline, we got an extra hawkish confirmation! So the WSJ move is wrong; everyone positioned on that is wrong, too. But the markets all... hang for a while longer. Clickclickclick—do more Spoos!Oh-shi—order error?! This snapped our trader out of focus; caught between figuring out this error and listening to Trump—he’s listing every country now! “… you think of European Union—very friendly—they rip us off!”
The flows are different now, just pulses, bits of choppy flow pushing the S&P lower, not as quick as the WSJ upside. No price confirmation for our trader. Yet the floor helps to commit: This is huge! It has to go!—the traders roar. He holds, but doesn’t add in. Can I do anything else? Euro? No, its correlations are broken now. Just hold what you have!
The S&P holds a small range, but then everything cracks. The S&P offers down the screen, the 5-Year bids. Our trader manages his positions dynamically, scaling out on big flushes and adding more as the S&P bids back up. He scales out more of the 5-year, but over the next twenty minutes, he’s done. The floor discusses holding what they have left until the close. Our trader replies he’s out completely.
He glances at his screens: best day and trade—over a quarter of a million dollars. It took a while to reach this milestone, but he’d soon break this record and set others in the next fortnight. That’s how it is for the long volatility trader: the best and worst days come in clusters.
Reflections
The next evening, our trader glances at his phone. Asymmetrist has messaged him. They want all the details! He obliged, only to receive a series of follow-ups:
Did the thin markets change your execution?
“It made me more cautious. I knew the markets would be pinging around much more; it was a hyped event under close watch. Thin markets meant I wasn’t pre-positioning, so I wouldn’t be trading anything I didn’t think would be significant. The thinness made me exit faster. I wanted to trade more size across more products, but half were closed due to the time. Yet, execution-wise, it was similar to my usual execution—but I wasn’t positioned beforehand. I only wanted to take positions on a proper outlier.”
How do you decide on how many clips to hit? Is there a scale or instinctive process?
“It’s how much I think I can get off! If I can do a couple of clips before the market moves, that’s fine. Sometimes I can’t clip before it goes, or if I’ve been too slow to get to the market, the clips I get off will change. In a massive outlier, I’ll do as much as possible. But in my head… did I want 400 Spoos on? Yeah, obviously—in hindsight it would’ve been a great trade. But 400 Spoos, when we are bid and offered like 15 lots? That 400 moves the market wildly! And then I’ve got to get out. If I’m wrong or misjudged… a lot can go wrong. I need to manage my risk. If I don’t? Too much size becomes a problem.”
How did you manage switching between ES [S&P Futures: CME], ZF [U.S. 5-Year Note Futures:CBOT] and Gold [Futures:COMEX]?
“I had the price ladders next to each other, so it wasn’t too difficult. I already had those products in mind.:
If it were small or in line, I’d only hit ES.
If it were slightly out of line, I’d go ES and ZF.
If it was hugely out of line, then ES, ZF, and Gold.
I had all three charts and ladders set up. It was a prep game beforehand, not a dynamic, on-the-fly decision. That made a significant difference.
You said the day should have been twice as big. Why didn’t you size up? Was there doubt?
“I clipped in and wanted to be bigger. It wasn’t doubt. But I got a couple of rejections on the ladder—it threw me out of the zone. I got the size I wanted in ZF, but got caught up in Trump still talking. I heard ‘China’—and yes, that was big—but then I realised he was listing every country. My brain was caught between Trump and the rejected orders... it pulled me out of the moment. And at that point it’s gone—market’s thin!
I should’ve just added and accepted the risk. But I didn’t hit it. Maybe I thought: I’ve got a position on, just ride it! I managed it well, but it could’ve been more P&L if I’d accepted the order error and fought to get another clip in.”
What would you have done differently?
“I wouldn’t have fought Gold as much. It was obvious what it would do—it didn’t—so I should’ve given up faster. Other markets were volatile, and Gold wasn’t—that was a warning. To the [34% tariff] downside? I’d have taken more size in equities and bought Gold. By then, Gold was strong and refused to trade lower. That was the key point.”
How did you feel after the trade?
“I wasn’t buzzed going into [the event]. I was happy it ended up as my best day; a really good day. But I don’t get the same kick anymore... it’s a bit of a shame. I’m annoyed at how I handled the downside—it wasn’t good enough. But I was reinvigorated. It reminded me why I love trading—there’s true satisfaction when something like this comes together.”
Read Part I: (Monday 7 April Trading Action)
Read Part II: (Tuesday 8 April Trading Action)
Read Part III: (Wednesday 9 April Trading Action)
Read Much More About These Special Traders!
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Acknowledgements, Permissions & Disclaimer
Grateful acknowledgment to AXIA for granting access to one of their traders, and his contributions and efforts towards this article.
The first photograph of President Donald Trump at the lectern is a public domain image originally released by the White House, retrieved via Flickr. Modified from the original. Public domain. Link to file.
The second photograph of President Donald Trump with the tariff chart is a public domain image originally released by the White House, retrieved via Wikimedia Commons. Modified from the original. Public domain. Retrieved from Wikimedia Commons: Link to file.
Disclaimer: Do Not Do Stupid Financial Decisions. This Is Not A Game.
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