Flip-Flop-Flip: Markets Move Wildly as Presidential Race Becomes a Toss-up
Posted on: November 4, 2020, 02:04h.
Last updated on: November 4, 2020, 08:33h.
One long night down. Who knows how many to go? The outcome of the 2020 Presidential Election still is unclear, as neither Democratic former Vice President Joe Biden nor Republican President Donald Trump reached the 270 Electoral College votes necessary to claim victory on Tuesday.
As of 3:15 am ET Wednesday morning, The New York Times had Biden with a slight lead at 227-213 with states worth 98 votes still uncalled.
The night suffered from some unprecedented chaos. Several betting markets made Trump the favorite shortly after 8 pm ET. Political trading market PredictIt went down for most of the night, and President Trump declared victories in states still too close to call and threatening legal action to stop counts in states where he’s currently leading.
This is an embarrassment to our country. We were getting ready to win this election. Frankly, we did win this election,” said Trump in an early Wednesday morning address to supporters at the White House.
Biden spoke to supporters a couple of hours earlier and said it was premature for either side to declare victory.
Political pundits believe a majority of ballots that remain uncounted in several key states, such as Georgia, Pennsylvania, and Wisconsin, will likely go to Biden since Democrats pushed supporters to take advantage of early and absentee voting programs that were expanded across the country because of the COVID-19 pandemic.
“We believe we’re on track to win this election,” Biden said. “We knew because of the unprecedented early vote and the mail-in vote that it was going to take a while. We’re going to have to be patient until the hard work of tallying the votes is finished, and it ain’t over till every vote is counted.”
Officials in some states have said it may take days to process their early ballots, and the looming legal challenges will likely only add to the time it takes to finally determine a winner
Trump Now Favored to Win Re-Election
For months, Biden held a comfortable lead in polls, in European and offshore sportsbooks, and in trading markets. All showed Biden with similar edges. And that lead was holding well into Election Day.
Then, all the trading flipped, thanks in part to Trump exceeding expectations in parts of Florida and gains he made in Ohio.
At 8 pm ET on Betfair, Biden was the favorite at -125, with Trump at +120. Just 20 minutes later, Trump became the -286 favorite to Biden’s +290. Meanwhile, Smarkets, which had Biden with an implied probability of 63.7 percent at 7:30 pm ET, had Trump with implied odds of 63.7 percent by 9:30 pm.
Interestingly, as of 4:10 am, Smarkets, which has taken $21.5 million in action, still has Trump as the -213 favorite to Biden’s +225. But Smarkets projects Biden to win 271 electoral votes. Betfair, which reported a handle of $534.8 million, lists Trump at -244 and Biden at +250.
Other sportsbooks of note have Trump a slightly heavier favorite. Ladbrokes lists Trump currently at -275, with Biden at +200. 888Sport has Trump -278 to Biden’s +220.
UPDATE (11/4 5:20 am ET) – The sportsbooks have seen the odds shift once again. Biden has now reclaimed favorite status at Ladbrokes, Betfair, and Smarkets. Both candidates have -114 odds at 888Sport.
PredictIt Crashes as Election Results Pour In
While the European markets were turning upside down, one of the few legal options available to traders in the States was down during what should have been peak trading hours.
“PredictIt staff are working diligently to repair an issue and bring service back as soon as possible,” PredictIt posted on its Twitter page just before 8:30 pm. “We appreciate your patience and understanding.”
Suffice it to say, in the responses, few showed patience or understanding, as they missed out on chances to cash in on the gains they made with President Trump. Others could not cut losses or take advantage of an opportunity as Biden’s stock lost 31 cents in an hour.
In Twitter speak, PredictIt’s explanation got “ratioed,” which happens when responses to a tweet far outnumber retweets. The 500 comments to 60 retweets indicates users were highly critical of PredictIt’s performance.
“So glad I took out thousands in positions to flip tonight that will be worthless by the time the servers come back up,” tweeted Mullgen in response.
Trump is currently trading at 72 cents, with trading reopening at 5 am ET after PredictIt performs site maintenance. Biden is trading at 30 cents.
UPDATE (11/4 5:20 am ET) – As trading reopened, similar movements took place on PredictIt as what happened in Europe. Biden went from 30 cents to more than double that in a span of minutes.
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