Going into Election Day, market participants fretted about possibly waking up to an unclear result. But with that outcome realized, they seem remarkably calm about not knowing the winner of the U.S. presidential race.
"Regardless of where the presidential slot goes, the market has gained confidence in that trajectory," said Eric Metz, president and chief investment officer at SpiderRock Advisors. Given recent history, market participants had geared up for extreme election-related volatility. In 2016, the VIX jumped overnight after Trump's surprise victory. However, the VIX plummeted the following day as U.S. stocks rallied, reversing course from a late-night plunge in futures.
For much of the year - aside from March's coronavirus-driven sell-off in U.S. stocks - October futures traded at a premium to other contracts as investors focused on the election as a major risk event. As worries grew over the possibility that a delayed or contested election result would prolong market volatility, November futures began trading at higher prices.
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