Option traders are expecting big moves across the market after Americans head to the polls on Tuesday.
But their concerns about voting have clearly eased since August, according to an ORATS analysis shared with MarketWatch earlier this week.
Based on the price of specific contracts expiring immediately after the vote, traders expect the ETF tracking the S&P 500 index to move 1.5% in either direction. This is down from 2.5% during the summer. Similar movements have been seen in options linked to ETFs that track gold, long-term government bonds, and energy stocks.
“Charts of economic segments, including the S&P 500, energy, gold, and 10-year bond funds, show a consistent decline in implied movement since August. “This indicates that we expect volatility in these areas to decline as we approach .
It’s not at all clear whether this change is due to betting markets reflecting the increased probability of former President Donald Trump’s victory, or for other reasons.
