Volatility Markets Brace for Election Drama Like Never Before
- VIX futures spreads, swaption vol higher than recent elections
- Traders looking beyond just day-of protection as risks build
This article is for subscribers only.
Traders across major asset classes are sending the same message: Prepare for what could be the most-contentious U.S. presidential elections in decades.
One measure of hedging in the stock market is higher than at any point in the past three presidential elections. In the interest-rates market, implied volatility is well above levels reached in 2016 or 2012. And three-month implied volatility in the dollar-yen pair -- a classic haven trade -- has risen above the two-month tenor by the most in two decades, signaling demand for protection from turbulence near Election Day.