Traders chase post-election stock gains in U.S. options market

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Many shift from defensive to bullish post-election

Options players are piling in to riskier bets across the U.S. stock market, supporting a rally that has come on the back of fading election worries and expectations of a Republican lock on power in Washington next year.

Many are now shifting to a bullish stance, wary of underperforming a market that has rallied following a victory by Donald Trump and Republican control of both houses of Congress, which had been anticipated following the election and was projected by Edison Research on Wednesday. The result is expected to give Republicans a freer hand in pursuing their economic agenda, which includes tax cuts and looser regulations.

More broadly, the volatility landscape has changed dramatically, with the Cboe Volatility Index - a measure of demand for portfolio protection - sinking to a near four-month low of 13.67. Tesla options accounted for about 30% of the total U.S. stock options traded in notional terms on Monday, data from Nomura showed.

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