Merchants load up on market insurance coverage on fears of a contested election

A pedestrian carries an umbrella whereas strolling in entrance of the New York Inventory Alternate, Feb. 26, 2020.

Michael Nagle | Bloomberg | Getty Photographs

The probabilities of a contested presidential election are on the rise and merchants are gearing up for giant market swings after the Nov. three contest.

Futures contracts that monitor the Cboe Volatility Index (VIX) which are set to run out after the election are holding at elevated ranges. The VIX futures contract set to run out Nov. 18 — 15 days after the election — is buying and selling above 31, in line with FactSet. VIX futures contracts expiring Dec. 16 and Jan. 20 are each buying and selling above 28.

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