Traders are more anxious about the 2024 election than they have been before a vote in the past decade

• Traders are more anxious about the 2024 election than they have been before any vote in the past decade, according to a new Bloomberg analysis.

• Cboe Volatility Index contracts for October are trading at a notable gap with September futures, wider than 2016 and 2020.

• The spread sheds light on the degree of price swings investors are anticipating in the months before the election.

A key indicator shows that Wall Street is the most anxious it’s been before any election in the last decade.

The Cboe Volatility Index, known as the stock market’s “fear gauge,” began trading October futures earlier this week. Those contracts, which include the November 5 election date, are trading at a wide gap to September futures, Bloomberg data finds.

The price difference is now wider than it was in late January in the 2016 and 2020 election cycles, with October futures 3.3 points higher than the September contracts.

The 2024 election, which is increasingly looking like a Trump-Biden rematch after the former President’s wins in Iowa and New Hampshire, is now less than 10 months away. And the CBOE volatility contracts shed light on how much risk traders are perceiving in those coming months.

Like any year, the stock market fluctuates, but some technical analysts have observed patterns in the election cycle. Mark Newton from Fundstrat has said the months from March to August and then November to year-end will perform the best, as they historically have done in election years. Bank of America technical strategist Stephen Suttmeier, meanwhile, said August is likely to be the strongest month after a lackluster January to May.

Developments in the election are also stirring up other parts of the market, and after Trump’s victory at the Iowa caucuses, a Truth Social-linked SPAC skyrocketed 239%.

What comes after the election might matter even more, one strategist said. Ron Temple from Lazard said the 2024 election will have an outsized impact on the market and the economy as a “watershed moment” for global geopolitical balance.

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