How Hedge Funds Are Using the VIX to Predict Election Outcomes

With the VIX at 15.74 and the VVIX at 86.03, volatility markets are flashing unusual signals. Lucas and Luna explore how hedge funds are now using volatility derivatives — specifically the VIX term structure and VVIX skew — as predictive tools for political events, including the 2026 midterms. They walk through a specific trade: a long VIX call spread tied to election night, and explain why the VVIX is more informative than the VIX itself for tail-risk events. They also discuss how prediction markets and volatility markets are starting to converge, citing a recent Google employee insider trading case on Polymarket. This episode is a deep dive into the mechanics of volatility as a forecasting tool, with concrete trade examples and real-world implications. #HedgeFunds #Volatility #VIX #VVIX #ElectionBetting #PredictionMarkets #Polymarket #OptionsTrading #TailRisk #Midterms2026 #Derivatives #VolatilitySmile #Finance #Investing #FexingoBusiness #BusinessPodcast #AlternativeInvestments #MarketStructure Keep every episode free: buymeacoffee.com/fexingo