As worries about populism in Europe rise, investors bet on stock market volatility
Updated : March 22, 2019 06:46 AM IST
In one of the first concrete signs in financial markets that investors are bracing for political instability, VSTOXX futures, which reflect investor sentiment and economic uncertainty, have jumped in recent weeks.
While the classic gauge of fear -- known as implied volatility, which tracks demand for options in European stocks -- is currently at 15.68, futures that bet on the same thing over the coming months show a pronounced jump. That's because investors have piled on trades that bet on big swings in stocks as election day nears.
More than 350 million EU citizens will head to the polls between May 23 and 26 to elect a new Parliament, a vote that will shape the future of the bloc amid a backlash against immigration and years of austerity.