iVest+, a leading innovator in trading platforms for educators and retail investors, today released new data that indicates investors are more concerned about another wave of COVID-19 than the results of the election.
iVest+ examined open interest and put/call ratios by aggregating the options for all 500 stocks in the S&P 500 and then compared the data for options that expired before the election (up to Oct. 30, 2020) and those that expired after the election. The data shows that put interest stretching out into 2021 is near historic levels, whereas put interest before the election is balanced at more normal levels.
“If traders were concerned about the election, either because of a particular candidate winning or because the results might not be known for some time, we would expect to see a skew toward buying puts for protection or with the intent to make money on the downside,” said Rance Masheck, CEO of iVest+. “We just aren’t seeing that. Put/call open interest right now only favors puts by about 55% to 45%. That’s a typical ratio we see throughout the year.
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“However, when you look at contracts across all of the S&P 500 that expire after the election, the number bounces to an eye-popping 80%. The actual trading volume is still heavier in calls, but the open interest, which expands as people write new contracts, has skewed heavily to puts in the months ahead.”
Masheck explained that iVest+ is not just looking at the options data for the SPY or even SPX. The data includes every stock’s options individually — a monumental data crunch.
“It is interesting that we don’t see the same data just in the options on the S&P itself,” Masheck said. “This data is only revealed by looking at the sum of how traders are viewing all of the stocks in the bucket. We think that’s a more important number since more people focus on individual stocks. It’s the equivalent of getting a mental read on how people view all of the stocks they trade.”
