Wall Street trading desks are having a great year. The election could continue like this. (video)

The trading desks of major banks are expecting a flurry of activity after the chaotic 2024 election is over, and that could cement what is already a banner year for Wall Street.

Trading volume tends to increase immediately after a presidential election ends, according to Bank of America Chief Markets Officer Jim Demare, starting the day after the event.

This year, he told Yahoo Finance, “I would anticipate that … the next day is mirrored in those previous years.”

If that happens, traders could add to what is already a record. Through the first three quarters of 2024, JPMorgan Chase ( JPM ), Goldman Sachs ( GS ), Morgan Stanley ( MS ), Bank of America ( BAC ), and Citigroup ( C ) posted roughly $89 billion in combined fixed income revenue and variable income trading.

Not only is it 5.5% more than in 2023, but it’s also the highest trading amount during that nine-month period ever recorded by Wall Street’s five biggest banks. Stock trading is driving much of that performance.

“We expected people to want to put some risk on after the election,” Stuart Kaiser, head of equity trading strategy at Citigroup, told Yahoo Finance.

“With the caveat that the election is resolved in a simple way, then the US stock market looks set for the rest of the year,” Kaiser added.

The reasons for the rise so far this year are widespread, from an interest rate cut initiated by the Federal Reserve to geopolitical unrest to the uncertainty surrounding this year’s presidential election.

“The wide spread of potential outcomes in elections, interest rates and geopolitical situations globally has created volatility and pockets of opportunity, which banks have benefited from,” said the analyst at Barclays Jason Goldberg on Yahoo Finance.

Markets currently see the US election as the most volatile event before the end of 2024, based on implied volatility tracked by Citigroup, followed by the October jobs report due on November 1 and third-quarter earnings from star chipmaker Nvidia ( NVDA ) .

Some on Wall Street aren’t waiting for Election Day and said they are already making trade moves as they anticipate Republican Donald Trump’s victory.

They include Dan Loeb, founder and CEO of hedge fund Third Point, who has said his firm has bought stocks and options that could benefit from a Trump administration.

“We believe the proposed ‘America First’ tariffs will boost domestic manufacturing, infrastructure spending and the prices of certain materials and commodities,” Loeb told Third Point investors last week in a letter.

“We also believe that a reduction in regulation in general and especially the activist antitrust stance of the Biden-Harris administration will unleash productivity and a wave of corporate activity.”

There is certainly a risk that too much chaos or uncertainty could lead to less trading activity or even higher losses in extreme cases.

But the volatility surrounding an event is generally seen on Wall Street as a positive for trading desks that typically don’t actively hold positions for long periods.

“We’re in the moving business, not the storage business, so to speak,” Bank of America’s DeMare said.

David Hollerith is a senior reporter at Yahoo Finance covering banking, crypto and other areas of finance.

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