Viewpoint: Investors increase exposure to stocks and cryptocurrencies in preparation for volatility in the U.S. elections

ChainCatcher news, Piper Sandler & Co. options chief Daniel Kirsch stated: "We continue to see interest in U.S. election trading, which has picked up in recent days. Clients expecting Trump to win the election are increasing their exposure to financial and cryptocurrency stocks, while those betting on Harris are buying options on renewable energy stocks. Hedging has also increased, with traders buying put options on the S&P 500 index and QQQ ETF."

Short-term S&P 500 implied volatility has remained elevated relative to the one-month level, as the impacts of the election and Federal Reserve rate hikes have permeated the calculations of short-term indicators. The Cboe VVIX index, which measures VIX volatility, is also at a high level.

Penn Mutual Asset Management portfolio manager Zhiwei Ren commented: "Currently, the options skew is significant, with VIX far above actual volatility. These signs indicate that market hedging measures are in place."