5 trading strategies to navigate market volatility this election season

May 18, 2024, 10:44:51 AM IST1/6

​Play on Polls

Trading during elections requires careful consideration of market sentiment, potential volatility, and specific trading strategies to navigate the uncertainties associated with such events. Here are 5 trading strategies that can help in this market: (Source: Stock Edge)

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​Volatility Trading Using Options

Increased uncertainty during elections can lead to higher market volatility. Options trading strategies like straddles or strangles can be effective in profiting from price swings or hedging against unexpected market moves.

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​Sector Rotation Based on Political Promises

During elections, political parties typically make promises that can impact specific sectors such as infrastructure, healthcare, or technology. Traders can capitalize on this by rotating investments into sectors expected to benefit from the winning party’s agenda.

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​Safe-Haven Assets in Uncertain Times

During election periods, investors often seek refuge in safe-haven assets like gold, government bonds, or defensive stocks. This strategy aims to protect capital during market turbulence.

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​Event-Driven Stock Picks

Certain stocks can be directly influenced by election outcomes or related events. Identifying and trading these opportunities based on election results or political developments can yield profitable returns.

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​Technical Analysis Amidst Political News

Using technical analysis alongside political news and election polls can provide insights into market sentiment and potential price movements. Traders can leverage chart patterns and indicators to make informed decisions

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