Viewing the French Election as a Potential Black Swan

The video discusses market concerns surrounding the French elections, highlighting the potential for it to be a Black Swan event due to its significant impact despite being improbable. Comparisons are made with the Trump and Brexit elections, noting differences in polling data. The volatility and uncertainty in polling are emphasized, with investors showing nervousness about French assets. Despite low general volatility, protection strategies are relatively cheap, and shifts in options and FX markets are observed.

What term is used to describe the potential impact of the French presidential election?

• Grey Swan event

• Black Swan event

• Golden Swan event

• White Swan event

How does the French voting system add complexity to the election predictions?

• It is based on proportional representation

• It uses a single transferable vote

• It relies on electronic voting

• It has a two-round system

What is the main concern for investors regarding the French election polls?

• The polls are not being conducted frequently

• The gap between candidates is narrowing rapidly

• The polls are only available in French

• The polls are showing a consistent lead for one candidate

What financial instrument are investors using to hedge against political risks?

• Futures

• Stocks

• Bonds

• Options

Which past events are mentioned as examples of hedging before major political outcomes?

• The Greek financial crisis and the Italian referendum

• The Brexit vote and the US presidential election

• The Spanish election and the German reunification

• The Russian default and the Asian financial crisis