Wall Street’s Big Bet on a Trump Win

On October 29, a week before the election, a California hedge-fund manager was letting me in on some of the trades he’s made ahead of the event. On that day, the odds of Donald Trump winning the presidency on Polymarket, the offshore betting site, had hit their highest level — 67 percent — since Kamala Harris entered the race. One of his picks, he said, was GEO Group, the private-prison company. It just so happened that GEO’s stock was trading in roughly the same pattern as the betting odds on Trump, reaching a high not seen since mid-July.

“Very controversial stock. A lot of managers won’t own it because it’s seen as evil. They own private prisons, and they run detention centers and track migrants who come over the border,” the hedge-fund manager, who asked to remain anonymous, told me. “But to us? We remember what the stock did after Trump won last time. It doubled after the election. I mean, it actually doubled. And, by the way, we remember what happened to it one year later, too. It lost all of that value and then more.”

Is there anybody left on Wall Street who thinks Kamala Harris is going to win? With days to go before the election, it seems everyone in the world of finance — from billionaire investor Ken Griffin to convicted fraudster Martin Shkreli — is predicting that Trump is going to trounce his rival to win his second trip from Mar-a-Lago to the White House, and they are betting accordingly. The capital class expects the kind of pro-business, tax-cutting, go-go-go economy that was a hallmark of all but the last year of Trump’s first term. Bitcoin, gold, oil companies, and health insurers have all hit or come close to all-time highs, as money managers try to position themselves in assets that they think will rise on news of a Trump win. “They’re bidding gold, they’re bidding bitcoin, they’re bidding every asset in sight, and they are shorting the fucking shit out of bonds,” the hedge-fund manager told me. (Trump’s tariff-heavy, low-rate economic agenda is expected to lead to higher inflation, which would make bonds less valuable to hold over the long run).

Of course, there are prominent Democrats among the financier class, including Raymond McGuire, the president of Lazard, Marc Lasry of hedge fund Avenue Capital, and billionaire owner of the Dallas Mavericks Mark Cuban. Jamie Dimon, the longtime CEO of JPMorgan Chase, has reportedly told friends in private that he supports Harris, even though he is publicly remaining neutral. Another hedge-fund source told me that it has become less culturally acceptable this year to be seen as liberal, particularly after Bill Ackman’s rallying cry against DEI programs. It is unclear whether they are bucking the trend and investing for a presumed Harris win, remaining on the sidelines, or quietly positioning themselves for another Trump administration.

Investors have been doing this kind of thing — trying to figure out in advance how a big event will play out and invest accordingly — for millennia. But there is something novel about the 2024 election; it is considerably more financialized than any prior one in the U.S. Election betting, which became legal last month, has created a whole new dimension for oddsmakers and investors. Polls show a dead heat, but on betting sites like Polymarket and Kalshi, Trump is close to a two-to-one favorite. For some investors, the betting odds have essentially eclipsed the polls. “A lot of market participants I talk to are positioned for an almost-certain Trump victory. When I ask them why, virtually every one of them has pointed to the September/October move in the betting markets, toward Trump,” Jim Chanos, the famed hedge-fund manager, wrote on X.

But it’s not just betting odds. Bitcoin (which Trump now supports) has traded above $72,000, near a new all-time high. Gold is $2,781 an ounce, also a new record. ExxonMobil is trading near it’s peak, after John Paulson, another hedge-fund manager who’s widely seen as a pick for Trump’s treasury secretary, said he would eliminate subsidies for solar and wind energy. United Healthcare, one of the largest insurers in the U.S., is also near its all-time highs after Republican Speaker Mike Johnson vowed to kill Obamacare. The S&P 500 stock index is up 10 percent since early August, when Harris’ odds of winning on Polymarket were much closer to 50 percent. (On Thursday, stocks lost about $1 trillion in market value, mostly on lukewarm tech earnings, but it probably didn’t help that betting averages also jumped for the Democrat, too).

And then there’s Trump Media & Technology Group, the ex-president’s parent company for his Twitter clone. For most of October, the company went on a tear with the share price more than quadrupling from an all-time low. At its peak, it was worth more than $10 billion. (It’s since lost about a third of its market value). Trading under the ticker DJT, the company is a wildly volatile meme stock whose core business — social media and streaming for conservatives — is largely seen as beside the point. “If Trump wasn’t involved, then the stock would be worthless,” Greg Bowden, a supporter who actively trades the stock, told me in August. DJT’s recent rise, traders believe, reflects the actual DJT’s increased odds of winning.

All these metrics, as fuzzy and unscientific as they may seem, have created a dilemma for investors. Traders tend to trust markets. “Usually, the money is right,” the hedge-fund manager told me. Even if a given trader doesn’t think Trump will actually win, they might be tempted play the action — staying on the sideline could be leaving money on the table.

But there are legitimate questions about bias: Bettors tend to be men, who make up a smaller share of the electorate, and Polymarket runs on crypto, which is still fairly outré as far as the general population goes. Add onto that the unregulated nature of some of these sites, and the odds seem far less certain. Researchers have found that Polymarket is awash in fake trading, according to Fortune, though it’s not clear if those trades are in fact skewing the results. There appear to be a handful of traders who have bet big on Trump, while bets on Kamala Harris winning appear to be more evenly distributed among users, according to a prolific Polymarket trader who goes by Domer.

It’s impossible to know now whether the odds reflect groupthink or just smart money. “Wall Street doesn’t want the Democrats to win. Let’s call it for what it is. It’s not fear. It’s actually what they want. It’s their preference,” the California hedge-fund manager told me. “I just have this feeling, man, that on Election Day, the price of gold is gonna fucking get smacked. It doesn’t matter who wins. Everybody on these one-sided trades is gonna get wiped out right after the election.”