Election Insights: Post Primaries, Options Market Signals Low Risk

Despite Sen. Bernie Sanders’ strong performance in both the Iowa caucus and New Hampshire primary, the options market is not signaling heightened risk. Head of Global Asset Allocation Ashwin Alankar explores one reason why, and what it could mean for investors.

Key Takeaways

  • Following the Iowa caucus and New Hampshire primary – where progressive Democratic candidate Sen. Bernie Sanders had strong showings – options market prices are not signaling heightened financial market risk.
  • The reaction could suggest that a progressive Democratic candidate would increase the odds that President Trump is elected for a second term.
  • Trump’s reelection could be a positive for equities markets but could also increase the potential for a spike in inflation.