Options an optimal way to handle poll-like scenarios

A strangle is a put below the spot price and a call above the spot. It is less expensive than a straddle, but it will not deliver profit unless there is a large movement

The next 12 months will feature multiple elections and those will trigger market volatility. Elections are price-sensitive events, but they are also “known unknowns”. In other price-sensitive events, “smart money” creates early trends. For example, people can make good guesses about central bank policy; there are the Budget leaks; industry insiders know if a company has a good quarter and so on.

There is no “smart money” in free and fair elections since outcome is unknown. Even assuming a trader guesses right about the winner, nobody knows if a political party will stick to its stated manifesto. Hence, election results