If stock market forecast exists to make death seem like a respectable profession, political polls may just plainly prove the old adage that lie number and lie number.
Despite their widespread belief that former Vice President Joe Biden will make it difficult for President Donald Trump in a landslide crisis, the election results are still unclear, leaving the world in a suspended status of the result.
The race is so close that the clear winner is still unclear and votes are still counted on Thursday. Trump, who is lagging behind Biden’s electoral college votes, tweeted that the Democrats are trying to steal the election, as the votes have been counted after the polls are over. Biden has called on voters to be patient until all votes have been checked.
The uncertainty of the outcome does not seem to bother financial markets. Equities have risen sharply throughout the week, and the implied volatility of put and put options on stocks has mostly declined. Action shows a deadlock and dysfunctional love in Washington. Regardless of who wins the White House, the Republican-controlled Senate is silent, if not disabled, the possibility of any significant change to the tax code could harm Americans and wealthy corporations.
Predicting that the stock market will have strong moves before election news, regardless of the outcome, we advise investors to focus on buying stocks they want to own by sell cash-secured call options to exploit the stock’s decline. We also suggest a risk reversal strategy – sell an order and buy a call at a higher strike price at the same time period – on
S&P 500 Index,
which will pay investors for agreeing to buy shares if the market falls on election news, and at the same time make a profit if the stock rises in price.
Both approaches work well – and still make sense throughout the internship.
Because it is difficult to have an information advantage in the midst of political turmoil, investors who are able to handle volatility and have a long-term vision may find some interesting opportunities – especially In recent stocks have been downgraded – incl
Alibaba Group Holding
(BABA), and even large technology stocks like
com (AMZN) and
Consider Alibaba, a company we’ve won in this category since its IPO in 2014. Earlier this week, the Chinese government abruptly canceled Ant’s IPO. Group, an Alibaba subsidiary in which Alibaba still owns a substantial stake. Alibaba shares were affected as investors adjusted to the absence as expected.
The Chinese Communist Party’s schemes are said to be more confusing than US politics, but here’s a fact: The continued rise of China’s middle class is a profound economic event. Alibaba is still an important way for investors to monetize this point, and any weaknesses in the stock are enticing.
With Alibaba’s US-listed shares around $ 285, investors can sell a December order 285 and buy a December 290 call. The risk reversal pays investor 2, $ 40 to buy shares at $ 285 and participate in rallies above $ 290. This includes Alibaba’s Singles Day sale on November 11.
Alibaba reported strong earnings earlier on Thursday, though shares fell due to the news. Its price is likely to remain volatile, so be prepared to adjust the actual price as needed. The weakness of the stock is provocative.
Over the past 52 weeks, Alibaba shares have ranged from $ 169.95 to $ 319.32. This year, shares are up 35% and 53% higher than last year.
There is no way to deal with the problem: Ant IPO canceled – possibly a delay to resolve new regulations – is disappointing. What we do know, however, is that Alibaba is still well-positioned to benefit from the growing middle class even as the risks of government intervention are now high.