What Is Wall Street's Fear Gauge Telling Us About the Election? -- WSJ

Dow Jones11-05 21:45

By Gunjan Banerji

Traders are bracing for a bout of volatility around the U.S. election, one that quickly subsides.

Futures contracts tied to the Cboe Volatility Index, or VIX, that expire this month are trading above those expiring in December or January, a sign that traders are positioning for heightened turbulence this month.

Trading in put options tied to the VIX, which would likely profit if the gauge fell, surged to the highest levels since August on Monday. The volatility gauge rose ahead of the 2016 and 2020 elections and subsequently collapsed after the event passed.

Many traders will be watching the VIX and its futures contracts as the election results trickle in Tuesday night, since those instruments trade around the clock.

This item is part of a Wall Street Journal live coverage event. The full stream can be found by searching P/WSJL (WSJ Live Coverage).

(END) Dow Jones Newswires

November 05, 2024 08:45 ET (13:45 GMT)

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