The White House has extended the deadline for the sale of TikTok to December 18th. This is the fourth time the deadline has been pushed back as the situation evolves. The previous deadline was approaching, and while a deal framework has been created, specific details have not been made public. Oracle is the frontrunner to buy TikTok.

Oracle’s Strategy

Analysts think this acquisition could help Oracle earn money beyond its AI business. There are expectations for discussions between Trump and Xi to move forward in an upcoming call. Despite recent developments, Oracle’s shares have increased by $3.20 to $305.25, though this is still below the earlier high of $319.97. We are witnessing a familiar pattern where political negotiations impact market prices, especially concerning foreign technology assets. The current uncertainty echoes the TikTok situation from late 2020, reminding us of how to navigate the upcoming weeks. Looking back at TikTok, repeated deadline extensions caused significant fluctuations in stock prices. Oracle’s shares soared on acquisition news but sharply declined from their high of $319.97 once a delay was announced. This illustrates that gains driven by headlines can be temporary until a deal is finalized.

Managing Market Volatility

Traders should focus on volatility rather than the direction of a single stock. Geopolitical news has led to sharp, unpredictable swings, making options strategies that benefit from price changes more effective. Implied volatility in the tech sector has increased by 12% in the past month, signaling that the market is anticipating more uncertainty. Buying protective puts on companies involved in current trade negotiations may be a wise hedge. As seen with Oracle, initial excitement can quickly disappear, resulting in losses for those who bought at peak prices. Selling call options against existing stock holdings can also help collect high premiums from this uncertainty. Political risks can influence the broader market, not just one company. The VIX, a measure of market fear, recently rose from lows of 13 to over 17, indicating growing anxiety. Considering options on major indexes, like the Nasdaq 100, could protect against a sudden downturn if negotiations stall. Create your live VT Markets account and start trading now.

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