Cybercrime: How to Trade and Protect Yourself – Introduction
Equifax is one of the three biggest credit bureaus in the United States. The company is a member of an oligopoly that controls the credit industry in the United States. The other companies are Experian and TransUnion. Two weeks ago, Equifax announced that its systems had been hacked and data of more than 143 million Americans stolen. The data which was stolen includes users email, phone numbers, and social security numbers. The hackers will sell this data to other users who will use the data to make transactions illegally. The crime came a few months after Yahoo announced a similar hacking which exposed millions. Experts believe that this type of crime will continue. Traders like you will be affected.
How to trade Cyber-Attacks
As a trader, you can benefit a lot from cyber-attacks. This is because companies react significantly when the news is released. In Equifax’s case, you expect the company’s stock to fall as investors react to the situation. Politicians in congress have called for an investigation. Because of the magnitude, other agencies are also looking into the issue. The chart below shows how the company’s stock has reacted to the news. As you can see, Experian’s stock dived. The same move was replicated to that of TransUnion which also fell with fears that hackers might target it next. In the long term however, I believe that TransUnion will recover because it was not directly associated with the attack.
After shorting the company, you should now look at going long cybersecurity companies. When there is such a massive cybersecurity issue, chances are that people and organizations will take measures to prevent future attacks. This is because all companies are vulnerable to such attacks. Therefore, you need to look at buying opportunities in the cybercrime areas. As you can see below, companies dealing with cybercrime saw their shares appreciate after the attack.
After making money making these trades, you need to learn how to protect yourself from being hacked. You can do this by following a few strategies. If big companies which have allocated billions of dollars to cybersecurity can be hacked, what about you?
First, you need to have a very strong password for all of your transactions. You should create your passwords with cybercriminals in mind. The problem with many people is that they use passwords that are easy to guess. Some of the most common passwords are: 12345678, password, qwerty, and google. To stay safe, you should avoid using these passwords. This is because hackers always try them when they want to hack you.
Secondly, you should avoid repeating the same password for all your transactions. This is a common problem among many accounts. They use the same passwords for multiple of their accounts. A good way to avoid this is by using several apps that help you prevent this. A good application for this is called Keeper. It creates for you strong passwords that are difficult to hack.
Third, you should be very careful on the websites you visit and the things you download. During the American election, Wikileaks released thousands of emails from Hillary Clinton’s campaign manager. It was reported that the manager had previously received an email with an attachment. After he received the email, he downloaded the attachment which the hackers used to access his email. Therefore, you should do the best you can to always evaluate every detail that you download.
Finally, you need to have a very strong anti-virus in your computer or mobile device. The antivirus that you use should be updated regularly. You should make it run in the background. Doing this will help you stay protected all the time.
Remember, a single mistake can leave you and your trading floor exposed to the hackers. Remember that you don’t have the benefit of having billions of dollars to stay protected.