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.
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(END) Dow Jones Newswires
November 05, 2024 08:45 ET (13:45 GMT)
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