Goldman Sees U.S. Election Concerns Flash in Options Market
- Derivatives pricing in 28% chance S&P 500 drops 17% or more
- Market positioned for relief rally to end 2020, firm says
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The U.S. options market is showing increasing investor concern about a stock-market sell-off next year, driven at least partially by the looming presidential election, according to Goldman Sachs Group Inc.
“As investors consider the outcome of the election, the distribution of S&P 500 levels implied by the options market at year-end is wide,” strategists including David Kostin wrote in a note Monday. While options pricing currently implies a 22% probability the S&P 500 ends next year above 3,400 -- an 8% gain -- it also shows a 28% chance the index finishes below 2,600, a 17% slump, they said.