An RBC Capital Markets analyst says that based on recent options trading, the market believes the next US president will be known by November 6th.
However, Amy Wu Silverman, RBC's head of derivatives strategy, believes the risk of a contested election is 'severely underpriced' in the stock market.
According to Markets Insider, the stock market is eagerly waiting for Congress to pass the next fiscal stimulus package.
However, no progress will be made until a clear winner of the election is determined.
We in the options market think about tail events, my worry now is that maybe a situation coming up where there is not a clear winner for a while. Amy Wu Silverman, Head of Derivative Strategies RBC Capital Markets
A tail event is an unpredictable and rare market outcome that could come as a shock to investors.