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Market Measures

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Omens of a Recession

Market Measures

Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

How accurate are markets at predicting recessions? tastytrade's Research Team crunched some numbers and examined some data to uncover the answer.

  • S&P 500, 1970 to present
  • Recorded all recessions since 1970
  • Recorded number of large selloffs greater than 1% in each quarter

We find that the number of large down days is actually greatest in the quarter before the first quarter of a recession. During the recession, there are typically more down days than the average quarter, but not as many as the quarter preceding the recession.

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