VIX going into the elections
Although VIX is always an important indicator to watch, in early 2016 it has provided particularly keen insights leading up to the Brexit vote and now is doing the same for the U.S. election cycle. As an FYI, VIX has jumped 50% in the last week (from 13 to 19), a sign of just how wild an election this is turning out to be. Interestingly, the VIX futures curve is partly in backwardation – both November and December expirations are closer to an 18 handle. This is communicating an expectation of higher volatility and uncertainty going into the election next week, with an expected lull in the action and hopefully more certainty thereafter.