Posted on 07/09/2020 4:34:33 AM PDT by MeneMeneTekelUpharsin
Goldman Sachs is warning that the presidential election could see delayed results, and is therefore recommending that clients hedge their market bets through December in anticipation of heightened volatility through November. “Given the several-week delay in finalizing the results of the 2000 presidential election ... the elevated volumes of mail-in ballots used in recent primary elections, and potential for increased mail in ballots this November, we see heightened risk that election-related volatility could extend beyond Election Day,” Kostin said in a note to clients Tuesday night.
Kostin said options market traders seem to believe the next president might not be announced on Nov. 3. Looking at that market, he noted that implied volatility around the election is “extremely high compared with prior cycles.” Some of this has to do with the ongoing impact of the coronavirus, of course, but the especially high level of implied volatility directly before and after the election suggests that traders believe the outcome could be uncertain.
Given this, Kostin told Goldman clients they should hedge their market exposure into December in order to stem any losses incurred from a nondefinitive election result. “Although the 20-Nov option expiration offers two additional weeks of cushion beyond 3-Nov, the potential for delayed results, a precedent for extended vote-counting, and a slightly inverted term structure lead us to prefer extending hedges to the 18-Dec quarterly expiration,” he said. “For context, it took 34 days for the winner to be decided in the 2000 contest between George W. Bush and Al Gore,” Kostin added.
Yes, one thing we can say for Trump is that he has really kept government spending down and single-handedly solved the Federal Deficit. He doesn’t get enough credit for that.
Why would results be delayed?
“Yes, one thing we can say for Trump is that he has really kept government spending down and single-handedly solved the Federal Deficit. He doesn’t get enough credit for that.”
Are you a Biden supporter? If you are, just admit it. But if not, for all of Trumps blemishes, he is the only one standing between us and Socialism/Communism.
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