We believe inbecause our studies and experience have proven to us that overstates the actual move. That move can be easily calculated, especially if you have a research team like ours to do the work. We can arrive with a expectation of price range using an option’s implied volatility; meaning with a 68% probability, the market is expecting prices to fall within the computed range.
Dr. Data and our research team provided a series of charts with the expected move and actual move for the SPY (S&P 500 ETF), IWM (Russell 2000 ETF), TLT (Bond/30 Year Treasury ETF), GLD (Gold ETF), /CL (Crude Oil), XLV (Healthcare ETF) and EWW (Mexican Stock Index ETF). Tom and Tony commented on how the S&P 500 and Gold had stayed within their and how the Bonds had moved out of its expected range (-4.10). "This was your Home Run, your Superbowl for binary events. This was the most unexpected move with a ." It was an excellent demonstration of the virtues of selling high IV, and of “staying small”.
For more information on the Presidential Elections see:
The Skinny On Options Data Science from June 9, 2016:
Options Jive from October 19, 2016:
Options Jive from October 26, 2016:
Watch this tasty Extra withand for a review of what the markets were predicting and what actually happened.