QCP Capital Highlights Market Volatility Amid Upcoming Elections

According to PANews, Singapore-based crypto investment firm QCP Capital has observed that short-term implied volatility peaks on election day, expanding by 10 volatility points compared to the previous expiration date. The skew favors call options over put options, despite Bitcoin being approximately 8% below its all-time high. Meanwhile, the stock market presents a contrasting picture. The S&P 500 index has reached a record high, with 20% of companies set to release earnings reports. The options market leans towards put protection, anticipating a 1.8% fluctuation in the index the day after the election, on November 6. The correlation between the stock market and cryptocurrencies has reached a historic high of 0.83. Given the mean reversion trend and the differences in options market positioning, this could signal a turning point. The election creates a zero-sum game scenario for the stock market, with industry winners depending on the election outcome. In contrast, both U.S. presidential candidates are more supportive of cryptocurrencies than the previous administration, suggesting that any stock market weakness could lead to capital reallocating to the crypto sector.