• Kumar

How To Play The Stock Market On Election Week?

I want to cover how to play the stock market this election week based on the 3 outcomes that are possible on election day.

What are those outcomes?

  1. Biden Win (currently favored, odds -200)

  2. Trump Win (current underdog, odds +175)

  3. Contested Election

The market is currently at unease because of the election and it needs a clear winner. Early on it seemed as Biden was going to win the election based on polls (if you believe in them) and the market was most likely pricing in the move. Trade deals would have been restored with Biden and the market wants this (as you know.. everytime we got close to a trade deal the market shot up, right now that is probably not likely with Trump as president). Biden's lead is diminishing currently and the market does not like this. Add to the factor COVID cases are surging again, it's adding fuel to the fire.

Three Outcomes Possible

  1. If we get a clear Biden Win, the market will move higher after election day. The gains after election day rally may start to disappear as Trump will do as much as he can to create chaos before leaving.

  2. If we get a clear Trump Win, the market will still move higher after election day (but to a lesser degree).

  3. If we get a contested election, the market will crash MUCH harder than it has these past few days. We will clear the $SPY 320 support levels and move into low $300s or below. This is by far the WORST outcome possible. I would be prepared for this scenario as this will most likely affect your own portfolio unless you have hedged yourself. Purchasing Nov 6th or following week $SPY puts at $315-310P would make sense as a hedge against your entire portfolio.


You can except a lot of volatility until election day at this point, tomorrow does not look to be a green day with UK ordering a full month long shutdown. USA may very well likely have more shutdowns in certain areas of the country in the next 2-3 weeks, we are already seeing certain cities/counties and states take on more restrictions.



If your to stressed about your portfolio, take a look at this quick video on some Wallstreetbet Gamblers losing or making their entire account! Weekly Series starting!


295 views
Get Alerts On Our Blog

© 2019 by Pineapple Stocks LLC. AZ: 1990944 Copyright Reserved

Once again, we stress the importance of understanding all of the risks of any form of trading or investing that you choose to do. One should fully understand the worst-case scenario prior to trading or investing real dollars. Past performance is not necessarily indicative of future results. You take full responsibility for all trading actions and should make every effort to understand the risks involved. Pineapple Stocks LLC. is not responsible for any losses that may occur from trading our opinions. You must take on your own due diligence.  
Please read our terms and conditions. By subscribing, joining or purchasing a membership you are agreeing to all terms and conditions.
View our terms and conditions under Plans pages. SMS alerts may have additional fees.