That makes sense.

I'd have to move back my date prediction in that case.

As the U.S. stock market continues to rally to record highs, the attention of many investors is turning toward November’s elections as a source of risk.

However, hedging against that potential volatility doesn’t come cheap. In fact, it’s currently the most-expensive event risk on record based on a common way to bet on volatility known as a “butterfly trade.”

Futures tied to the Cboe Volatility Index expiring in late October closed on Tuesday at 33.5, compared with a spot VIX that closed at 26.1. Those October contracts, which are currently the second-month futures and reflect expected volatility in the month after they expire on Oct. 21, are also higher than the first-month futures expiring in September and the third month expiring in November.

One “butterfly” trade would be to buy one unit each of the first- and third-month contracts while selling two units of the second. Currently, that trade prices with a reading of -6.9, the difference in costs between the butterfly’s “wings” in September and November and the “belly” in October. That pricing reflects the premium that investors are giving to own volatility over the election.

“In the history of the VIX futures contracts, we’ve never had an event risk command this sort of premium into forward-dated vol at a specific tenor,” Bloomberg macro strategist Cameron Crise wrote in a blog post. “That obviously suggests that markets anticipate some pretty incredible fireworks.” He excluded a higher premium on March 18 of this year since front-month futures expired that day, when the S&P 500 fell 5.2%.

The spread between October and November VIX futures is also wide at about -1.7 instead of about 0.2, which history suggests it should be based on the level of the spot VIX, according to Crise.

“If it starts trading above where it ‘ought’ to be, particularly given the risk premium lavished on the election, that could be a sign that punters are worried about 2000-style uncertainty,” Crise wrote, referring to the presidential contest between George W. Bush and Al Gore, which ultimately was decided by the U.S. Supreme Court. “You don’t need a particularly vivid imagination to think that that could get pretty ugly this time around.”

Debate night bump. Deadline extended to October 15th. If we make it that far.

This thread is just getting warmed up. Kavanaugh wrote today that absentee ballots that come in after election day could "flip" an election (even though results wouldn't be finalized until after those ballots are counted); says this could lead to "chaos and suspicions of impropriety."

I don’t think that’s what the Kav meant, even though it is what he wrote.

Public expectation is the winner is known by daybreak, certification of results be damned

If you think he is that bad at expressing his own legal opinions, you should be a lot more alarmed than that.


Not only are actual results not ordinarily verified until days later, but 23 states took 4 or more days just to verify their primary results this year.