SPY is trading at $759.85, and Polymarket gives it just a 29.5% chance of reaching $780 before November ends. That’s a 2.65% move with roughly 11 trading sessions remaining.
On the other side, the market gives SPY a 25.5% chance of falling to $730, a nearly 4% decline.
The two outcomes are priced almost identically, but the volatility behind those prices tells a very different story. Polymarket has adjusted to November’s selloff on the downside, while the upside still looks like it’s trading in October.
S&P 500 Today: Yearly Return Odds
Here’s what Polymarket is currently pricing:
The volatility mismatch
Both prediction market contracts are touch markets. SPY only needs to reach the target once during regular trading hours, even for a single one-minute candle. It doesn’t need to close above or below the level.
That makes it possible to work backward from each contract’s price and estimate how much volatility the market is expecting.
Start with the downside. The $730 contract implies 16.6% annualized volatility, while the deeper $720, $710 and $700 levels imply roughly 19% to 21%. Those numbers make sense alongside this morning’s VIX reading of 17.51.
Now look at the upside. The $780, $790 and $800 contracts imply just 11.8%, 12.3% and 12.1% volatility, respectively.
That’s much closer to October, when SPY realized just 11.7% volatility. Since November 5, realized volatility has jumped to 18.8%, and two of the biggest moves have actually been higher: a 2.34% rally on November 9 and another 1.31% gain yesterday.
The downside is pricing the market we’re in today. The upside is still pricing the quieter market we had last month.
Some of that difference is normal. Equity markets typically assign more volatility to downside moves than upside moves, reflecting investors’ willingness to pay for crash protection.
But even after allowing for that skew, the gap looks unusually wide. Using a more conservative 15% volatility assumption, the $780 touch works out to roughly a 41% probability. At the current VIX, it’s closer to 48%.
Polymarket is offering it at 29.5%.
There’s also a noticeable difference in activity. The four downside contracts from $730 to $700 have generated about $33,000 in volume, compared with just $14,500 across the $780 to $810 upside contracts.
The weekly board, which expires tomorrow, shows a similar imbalance. Its upside contracts imply 10% to 13% volatility, while the downside sits between 13.5% and 19%.
Why November is different
The turning point came November 5, when the S&P 500 plunged 4.4% in its worst session since April 2025.
The selloff wasn’t initially about interest rates. Investors were reacting to fears that the Democratic midterm sweep could lead to moratoriums on new AI data centers. Nvidia dropped 9.3%, and the semiconductor index lost 12.3%.
Since then, the economic backdrop has become even less favorable for stocks. October payrolls came in at 165,000 against expectations of roughly 65,000. Inflation also surprised to the upside, with headline CPI rising 0.4% and core CPI increasing 0.3%.
The 10-year Treasury yield briefly reached 5.02%, and Polymarket now prices a 25-basis-point December Fed hike at 90.5%, with a 6.5% chance of a hike of at least 50 basis points.
Normally, that’s a difficult combination for equities. Yet SPY has rallied 3.7% from its November 5 close.
The market appears to have absorbed the rate-hike outlook, at least for now. The bigger swing factor is whether investors regain confidence in the AI trade.
And there’s a catalyst coming.
Applied Materials and Cisco report earnings tonight, followed by October PPI tomorrow morning at 8:30 a.m. ET. Next week brings Nvidia earnings on November 17, along with FOMC minutes, retail sales and Walmart’s report.
Nvidia is especially important because it cuts both ways. A disappointing report could send AI stocks lower and put the November 5 lows back in play. But a strong report could just as easily drive another rally.
The difference is that Polymarket is already charging elevated volatility for the downside scenario, while offering relatively cheap exposure to a rally.
SPY’s all-time high is $781.62, set October 6. A move to $780 wouldn’t even require a new record.
The trade: Buy SPY $780 Yes at 33 cents
The November $780 Yes is my favorite position on this board.
At a 33-cent entry, the contract offers a potential return of roughly 203% if SPY touches $780 before the end of November. More importantly, the price looks cheap relative to the volatility SPY has actually been experiencing.
