Amidst the health fears, coronavirus is infecting more than just our lungs. In fact, those in the trading industry can see that this pandemic is about far more than what’s happening in our hospitals. Already, markets like Dow Jones have seen higher one-day losses than were even prevalent during the notorious ‘Black Monday’ of 1987. And, those figures only look set to worsen in light of Boris Johnson’s announcement to close all business apart from those providing essential services.
You could say, then, that this is an uncertain time at best for those in the trading world. Quite apart from health worries, such individuals are facing financial losses the likes of which far outstrip those in 2008. And, if you’re amid that downfall, it’s natural you should consider the ways, if any, that you can pull through.
We aren’t going to sugarcoat this — trading right now is set to come up against the most significant setbacks we’ve seen in generations. With overall losses currently anyone’s guess, many would even urge you to turn away from trading altogether before you risk yet more money losses.
But, if this is your livelihood, that’s easier said than done. After all, even turning away now wouldn’t help you to recover later. With that in mind, we’re going to look at a few of the ways you can make trading work for you through COVID-19.
Prepare for losses
No matter where you’ve invested, one thing remains certain — losses are inevitable at this stage. Even trades that have held up are looking increasingly volatile, and predictions state that the situation will remain uncertain for as long as twelve months+. With that in mind, you won’t be able to rescue all your funds from this situation. All you can do is prepare for those losses with new profit projections that allow you to think resourcefully about how you can save elsewhere to stay afloat regardless.
Find financial support
The financial support announced by the chancellor last week could also prove invaluable, especially if you trade in the overseas market. With an unprecedented relief package of £330bn, Rishi Sunak aims to help companies struggling due to the outbreak, traders included. While there’s no guarantee of eligibility, such support may be enough to see you trading through the pandemic, and certainly covering costs that you’d otherwise lose without compensation.
A firmer place for transparency
To some extent, transparency is always vital in B2B trades. Hence why this LEI search tool and other resources like it are regular go-tos in the financial sector. But, transparency becomes even more crucial to trades conducted at this time of uncertainty. Not only do you need to be upfront about your situation, but you also need to be 100 per cent clear on the ins and outs of any trade deals you enter. That means turning to those LEI searches, discussing every last detail and, perhaps most importantly, understanding what you could lose/what that would mean for your prospects. While no guarantee of success, open transactions like these are the best chance of finding some semblance of assurance for both parties. Make sure, too, that you keep an eye on trade news so that you can see, again with full transparency, any changes taking place that might affect the deals you’re doing right now.
Know the markets you can rely on right now
Reliable trading may seem like a tall ask given how badly coronavirus has infected markets, but specific markets are flourishing right now. Despite wide-scale losses, focusing your energy on these rarities could be enough to pull you through. Admittedly, even booming current markets are unlikely to garner enough profit to cover what you’ve lost. But, you’d be amazed how much help it can be to have some form of reliable income. Markets you’ll particularly want to keep an eye on at the moment include utility services, power production facilities, and even internet providers in light of increasing focus on working from home. By investing in these areas and steering clear of the rest, you may just find that coronavirus needn’t be fatal to your trades after all.
Of course, no one can say for sure just how wide the impact of this pandemic will be on the trading world. Each company should consider, realistically, whether they would be best off cutting their losses and starting up again once the dust settles. But, if you think you have what it takes, then these pointers could just become the lifeline that keeps your financial enterprise safe.
Image by Lorenzo Cafaro from Pixabay
