In the world of finance options are investment opportunities based on an underlying asset (stock, commodity, currency, etc) that give an investor the right but not obligation to buy or sell that asset. Complicated formulas like Black-Scholes-Merton are used to determine the value of options where there are two variables that significantly drive value – volatility (up and down price movements) and time (the date the option expires). The more volatility and time, the more valuable the option. In the today’s political arena these variables are having the same impact on the President. Volatility and time are increasing Trump’s value.
American volatility is at an extreme level. Political, social, and economic volatility have all converged and created national unrest never before seen in my lifetime. Cities are burning, businesses are collapsing, and the radical left has seized one opportunity after another to advance their Marxist agenda. And in the midst of it all is a Democrat Party fanning the flames lawlessness and disorder.
And then there is Donald Trump – the law and order President emerging out of all the chaos as not only the rational choice but the moral imperative. Not the better choice but the only choice. This option is binary, a one or a zero. Trump prosperity or Biden pain. Trump strength or Biden weakness. Trump the builder or Biden the bumbler. Trump wants the world to thank us while Biden wants the world to forgive us. What a difference.
The volatility index is pegged, but it is all going to fall on the Democrats. Remember, Trump closed China while the left called him a xenophobe. Trump wanted to open businesses as soon as possible while Democrats conspired to keep them shut down. Trump wanted children back in school while Democrats were robbing their childhood. Trump sees Americans as kings and queens. Democrats see them as pawns.
And what about the time variable? Well, sixty days in an election is almost an eternity. Much can and will happen. Each passing day is an opportunity for Biden and Harris to show America what bewildered and hazardous looks like and so far, they have been taking full advantage.
This whole thing may have started as a viral outbreak, but it has turned into a diabolical plot to thwart the President’s re-election. And while Black-Scholes-Merton shows us how volatility and time increase the value of a financial option, America is showing us how volatility and time increase the value of the Trump option. So what might that option price be?…It may very well be the price of the United States of America.