“The vanna effect may play a similar role in propelling the market post-elections as it did in 2020, says Garrett DeSimone, head of quantitative research at OptionMetrics. ‘The idea is that volatility has been priced higher due to hedging against election risk. Once this risk is resolved and the worst fears do not materialize, volatility is typically crushed,’ he says.”
Read the full Bloomberg article, “Buybacks, FOMO, ‘Vanna Tailwind’ Prime Stocks for Year-End Rally,” to learn more.