Election Day is finally here! Go Vote. I write my own name in every year for the county “Soil and Water Conservation District Supervisor” (Seriously. I sometimes think if the current supervisor’s wife didn’t vote, it’d be run-off election) But anyway….
Election day is a great opportunity to make some wagers! Last year we did pretty well overall on picks.
Since last year, Wall Street has put their eyes on the prediction markets to wager ..ahem,… I mean hedge risk on political events. Today, you can get Polymarket / PredictIt odds on a Bloomberg terminal.
Placing bets on contract outcomes is also easier than ever as more respectable brokerages start offering access via their own platforms to compete and collect those commissions.
There are currently 3 popular Prediction markets to place wagers and see the current implied odds of an event occurring.
Polymarket doesn’t officially operate in the US. U.S. users are blocked from the site with geo-fencing due to regulatory uncertainty. The Iowa Electronic Markets (IEM) also exists as a real-money prediction markets/futures markets operated by the University of Iowa. It’s considered non-profit though and has certain restrictions.
All prediction markets generally work the same.
Find the scenario you want to wager on - e.g. The 2024 U.S. Elections
Buy the contract for the amount shown between 0.01 and 1.00 . This is like the Delta value of a stock option. It represents the current pari-mutuel amount wagered that the outcome will occur or the theoretical “percent chance” the event will occur according to traders.
When the outcome is known, the contract expires and the value moves to either 0 or 1.00. Payouts and settlements occur per the contract rules.
Interestingly, due to relatively low liquidity and high volatility, slight variations on price can exist depending on how the question is presented. Smart enough people could arbitrage or parlay the markets accordingly for a slight edge.
Most eye catching wagers for Election 2024.
Important to note- Polymarket allows for live updates to the % chance with their embedded widgets so I don’t know exactly what the values shown will be when you are reading this, especially as polls close and votes start being counted.
Overall 2024 Election Winner-
Most markets have had Donald Trump as a slight favorite. Bet 55 to win 45. Not great risk-reward here though. Might as well be betting red/black in roulette.
Balance of Power in U.S. Government
Could be some good opportunity for a big win here. Will Democrats sweep? Will Republicans? Will it split? The multiple possible outcome contracts leave a better risk-reward opportunity early on. Remember a wager of 15 today would be a 5.666 - 1 payout if you win as the contract expires towards 100
Popular Vote Winner
A fun scenario to gripe over for people who hate the electoral college, the popular vote winner + overall election winner can be a good parlay to leg into at the right time. Go with Kamala Harris for the win here as California and New York run up the numbers.
Margin of movement in state vs 2020
A little harder to divine but a wager here by someone keeping their ear to the ground on local sentiment would pay off. Will Texas finally go blue? Will North Carolina continue red? Will somewhere deep blue surprise with a more moderate outcome than expected?
North Carolina Swing State
Switching to Kalshi for some down ballot elections, we can start to see the knife fights within swing states this election season. A wider margin of victory according to these contracts then mainstream polling—be on the look out for clear bias and over optimism. Crypto bros, day traders and billionaire donors are watching the numbers too and it doesn’t take much capital to run the numbers in a direction of their choice to corner these markets. Pass.
Government Shutdown this year?
Lastly, don’t forget the legislative and referendum votes. Like Super Bowl prop bets on the coin toss or National Anthem duration, these are some fun, out-of-the-box places to pick a side and quite possibly bet on failure, disarray and crazy ideas which came out of no where. (Oh sorry, You're just “hedging exposure”)
Good Luck with your wagers folks. It’s going to be a wild evening of vote-counting and result spinning.
Interested in being on the Trader Dads Podcast in 2025? Shoot me an email! I’d love to have subscribers on to sit for a discussion
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Thoughts? Questions? Comments?
Reach out! Maybe I’ll do a full post on the topic or as a Q&A
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