Market Volatility Plunges -- WSJ

Dow Jones11-07

By Gunjan Banerji

One of the most popular trades out there in recent sessions has been wagering that market volatility will drop sharply after the election.

For example, trading in options that would pay out if the VIX kept falling hit the highest level since August on Monday.

The trade appears to be paying off. The Cboe Volatility Index, or VIX, fell sharply to 16.27 on Wednesday after days of hovering above the 20 mark.

Betting that market turbulence will recede and that stocks will keep rising has been an active trade in recent sessions, according to David Boole at BayCrest Partners.

Many traders have also turned to trades that would profit if financials stocks kept soaring, a wager that the sector will do well under a Donald Trump presidency, Boole said. The S&P 500's financial group surged 6.2% on Wednesday, far outperforming the index's 2.5% gain.

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 07, 2024 08:55 ET (13:55 GMT)

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