“Gaming” The Election

Many times before an “event”, I watch the options action in the ETF’s that could be the most affected. Amazingly, a lot of the option activity PRIOR to the election results was pointing towards a Trump victory. I posted these out on Simpler Stocks BEFORE the election.

The theory was that if Trump was victorious, the markets would go sharply down. Obviously, the opposite happened eventually, but that was the prevailing theory. So I looked for unusual put activity in the major indexes, and unusual call activity in groups like infrastructure and drugs that would benefit from a Trump victory.

The first way I looked for these was to use an overall option scan. This INCLUDED every optionable product including ETF’s and Futures. As seen, the put action in the SPDR S&P 500 ETF (SPY) was overwhelmingly obvious.

Put action in SPY

The actual SPY option page was just as impressive.

SPY Option Page
Once I saw this activity, I decided to look for other huge put activity. As seen, the put activity in the PowerShares QQQ Trust ETF (QQQ) was much higher as well.

QQQ put activity

The iShares Russell 2000 Index ETF  (IWM) had MUCH HIGHER put activity than call activity.

IWM Put Activity

Before ANY big event, such as the Unemployment Report, the Fed Meeting, and the ECB, always watch the activity in the options market. It can really help your decision-making process!

Chris Brecher

Chris Brecher Stock Vice President

Chris Brecher grew up in Jacksonville, Florida. Though he went to college for Paleontology and Marketing, he settled for being a Stock Broker. In watching the brokers in his office lose every time by taking shots in options, Chris wanted to find out who was making money on the other side.

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