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Options traders are looking past the election even as results keep rolling in

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Options Action: What markets are saying as we await results

The options market is already looking past the results of the presidential election, even as key swing states are still counting votes.

Instead of focusing on near-term volatility related to the outcome, traders in some parts of the market are already looking ahead to the end of the year, and many are liking what they see in their crystal balls. For example, while the QQQ Nasdaq 100 ETF surged 4.5% in Wednesday's session, options traders spent the day betting that those big gains were just the beginning of an even bigger rally.

"We did see above average volumes in the QQQ today, and right now, the options market is still implying about a 10% move higher or lower for the Nasdaq index by the end of the year. One of the areas where we saw a lot of activity was the December 290-calls. Over 25,000 of those were trading for about $10," Optimize Advisors CIO Michael Khouw said Wednesday on CNBC's "Fast Money."

Buyers of those calls are betting that the QQQ will be trading above $300 by December expiration, which would put the ETF right around its all-time highs from last December, when it peaked around $303.50 per share.

That is clearly a bullish bet to make, but as Khouw would point out, it's also a hedged way to make that bet. These traders are risking less than 0.5% of the current price of the QQQ per contract, rather than diving in and buying it outright, which would increase their risk significantly.

The QQQ was trading about 2% higher in Thursday's session.

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