Vote premium drains from the front - Options Brief - 5 November 2026

The election premium was removed from near-term options in one session, while demand for protection against a sharp equity decline remained elevated.

• The one-day volatility gauge fell 47.98% to 12.08, the VIX declined 20.26% to 16.61, and the one-year gauge eased only 4.46% to 21.83, creating an upward-sloping term structure.
• The 6 November S&P 500 expiry fell from an implied move of 1.68% to 0.87%, below the 1.37% level expected from time decay alone, indicating that election premium was repriced out.
• SKEW rose 0.59% to 150.90 while the VIX fell by a fifth, preserving a high price for downside protection; implied correlation dropped 24.49% to 12.15 after reaching a record in the tracked series.
• Across 522 underlyings, median implied-volatility rank fell to 37.0 from 42.7, while Nvidia's rank barely changed at 65.9 after its shares fell 3.17% on regulation concerns.
• The S&P 500 gained 1.58% to 7,688.62 and used 78% of its weekly priced range to the upside, while gold used 169% of its range and the Kospi fell 4.41% overnight.

Takeaway: Near-term volatility pricing reflects relief after the vote, while elevated SKEW and the upcoming Bank of England decision and US payrolls leave tail-risk hedging in demand.