Hedge Funds, Long Onlies Dump Stocks, Degross Down Most Since March 2023 Bank Crisis Ahead Of Election

There is something rather remarkable afoot about Tuesday's presidential election: despite prevailing consensus that the two candidates, who couldn't be more different in terms of their proposed policies, are neck and neck, the market is eerily complacent, and as Goldman trader Brian Garrett pointed out last week, the implied move for the election day stands at just 2% - the lowest reading since Goldman began tracking the excess variance, a number which even Garrett notes "is perhaps getting a little too low."

But perhaps there is another explanation for the seemingly eerie calm: last week we proposed that the reason for the plunge in the implied move is the sharp drop in liquidity around the E-date (see Worried About Election Day Liquidity: There's An ETF Trade For That), and just one day later Goldman confirmed that this appears to be the case.