If current trends mean anything, in-person sales are rapidly declining when it comes to consumer goods. Research firms that look at shopping trends showed that Black Friday sales across the United States dropped. This is historically the biggest shopping day of the year, and it earned the nickname Black Friday because of the fact that this single day of shopping is often that day that many companies go from operating in the red (at a loss) for the calendar year, to finally being in the black (profitable). The fact that in-person sales are declining shouldn’t worry most people, though. Sales in general were up, but they took a different shape this year.
The raw numbers show that sales fell by about 5.0 percent over the two day period directly following Thanksgiving, the Friday and Saturday known as Black Friday weekend. The number of transactions fell by 7.9 percent. But while sales declined in this respect, online retailers had their best Black Friday ever. For the first time ever, online retailers surpassed the $3 billion profit number on Friday, something that analysts had been expecting for several years. All of this data was compiled before Cyber Monday, the shopping day where online sales are boosted.
Options traders have good reason to pay attention to these numbers. Many companies benefit from increased online sales, and many companies suffer from lagging in-person sales. And some of these companies are represented within options brokers. Finding these assets, and then using your knowledge of sales to capitalize on this movement in price will allow you to find profitable trades and increase your overall profitability. Because a lot of these companies are not represented in the options market, it might be tougher to find some of these opportunities, but they do exist. If your broker doesn’t have any of the assets in their list of available trades, then it might be a good idea to look for a broker that more closely matches what your needs as a trader are. Most brokers do not focus on stocks, but this doesn’t mean that they cannot have a handful of stock options available to you.
The importance of Black Friday might be on the decline, but that doesn’t mean that sales are dropping. Many businesses start sales earlier in the month, and many people purchase from these companies in an online setting, just because it is far more convenient. Sales overall are expected to be up during the U.S. holiday season. Some estimates say that this number could be up above a 3 percent increase. If this estimate is true, the non-cyclical goods sector is poised for an even bigger jump in value than what it has already currently seen in recent weeks. Taking advantage of this data for your personal trading is very possible, even if you are primarily a options trader.
This data is likely to weigh heavily on what happens with the U.S. dollar, too. A stronger stock market, which is what we are currently seeing for various factors, tends to weigh down the dollar. As monetary policy is decided, we should expect to see the dollar drop in price until the Federal Reserve lowers rates. There is just too much growth amongst U.S. stocks right now for the long term strength of the dollar to maintain itself. This fundamental data will eventually boil over into technical data, and having foreknowledge of this will give you a small edge in your trading, both in options and the Forex market. It just goes to show you how interconnected each separate marketplace is, and how paying attention to the emerging data in one market can help shape your decisions in another.