vstoxx futures and french election

Q

Quiet1

The term structure of vstoxx is interesting.

Apr'19: 23.40
May'17: 20.10
Jun'21: 20.55

This suggests to me the hedging of volatility is mainly around the April 23rd first round not the May 7th round, which seems odd. As I understand it Le Pen is almost certain to be one of the final 2 in the run-off in May so I don't get the premium for the April contract. If there's any uncertainty shouldn't it be over the May contract when, although the polls say Le Pen trails Fillon or Macron by a very long way head-to-head, there remains at least some actual uncertainty that the polls will hold when it comes down to it?

Interested in any informed opinions (I know I know why ask on ET yada yada)...
 
Because vstoxx April is actually the april may forward vol. so it includes the elections. The tricky part (and I haven't resolved it) is does that stay bid at expiry because it will incorporate the election or does the April vstoxx decouple from the listed because it's hard to replicate.
 
newwurldmn said:
Because vstoxx April is actually the april may forward vol. so it includes the elections. The tricky part (and I haven't resolved it) is does that stay bid at expiry because it will incorporate the election or does the April vstoxx decouple from the listed because it's hard to replicate.
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It should stay bid shouldn't it? Because May ESTX50 IV's will stay elevated until May 7th. But by then a drop in IV will not affect Aprill VSTOXX, since that's expired already.

There are no weekly futures in VSTOXX are there? They might be more interesting...
 
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