Tuesday, 3 November 2026

Tech rebounded on election day, but expiring protection and short calls outweighed it: the account fell 2.39%

On Tuesday technology shares rebounded after three weaker sessions, even though most stocks in the market fell. QQQ rose 0.62% to 685.28 and the Nasdaq-100 0.68%. Chipmakers recovered: Broadcom gained 3.07%, AMD about 3.7% and Nvidia 2.29%, while Microsoft rose 2.74%, Meta 2.36% and Amazon 2.06%. Apple fell 1.90% after its results. The S&P 500 rose 0.36% to 7,568.92, ending a three-day losing run, but the equal-weight S&P 500 (RSP) lost 0.33% and the Dow 0.38%: the gains rested on the largest technology companies. September JOLTS job openings were little changed at 7.5 million, against a revised 7.2 million in August. The 2-year Treasury yield rose to 4.61% and the 10-year to 4.95%. The U.S. midterm elections were held; after the close, AMD reported results above expectations, and its shares rose in extended trading.

Index volatility eased slightly, while QQQ option volatility edged higher. VIX fell 0.32 points to 20.83 and VXN 0.36 points to 30.53; 30-day QQQ implied volatility (own calculations) rose from 27.72% to 28.22%. The rise came from calls: 25-delta calls gained 0.76 volatility points to 24.14%, while 25-delta puts added only 0.08 points to 31.14% and 10-delta puts lost 0.35 points to 37.00%. The 25-delta skew narrowed to 7.00 from 7.68 points, and the skew index fell to 24.8 from 27.7. The front of the curve stayed elevated: VIX9D/VIX was 1.054 (prior 1.062) and VIX/VIX3M unchanged at 0.979; one-day QQQ options expiring on 4 November priced ATM implied volatility of 45.86%, against 28.17% for the 4 December expiry. On the Convexa scale the regime stayed Tense, with the event and negative-gamma modifiers: QQQ closed 4.59% below the model zero-gamma level of 718.23.

The account closed the session 2.39% lower, against a 0.30% gain in SPY. The largest gain came from the short long-dated puts, which lost value as QQQ rose. It was outweighed by the short long-dated calls, which gained in value as the market and call volatility rose, by short-dated protection in the 3 November expiry, which expired worthless, and by lower prices of the 9 November puts and of the long lower-wing puts. During the session, short-dated wings were opened in the 4 November expiry, protection in the 9 November expiry was increased, and additional long-dated calls were sold. Week-to-date and November-to-date, the result was −14.90%, against −0.18% for SPY. Since the start of the public record on 5 August the result was −10.43%, against −1.98% for SPY.

At the close the weekly QQQ straddle priced a move of ±3.02% to the Friday 6 November expiry (range 664.60–705.96), against ±3.30% a session earlier. QQQ closed 0.76% above its 200-day average (680.14). Ahead were the first session after the midterm elections and AMD's report, with the ISM services index on 4 November at 10:00 ET, productivity and costs and weekly jobless claims on 5 November at 08:30 ET, and the October employment report on 6 November at 08:30 ET.