Smarkets betting exchange has revealed that one of its customers pocketed £165,000 after successfully trading on the US presidential race.
Having been given just a 10% chance of success midway through the election night, Republican candidate Donald Trump secured victory in the race to the White House after a shock victory in Wisconsin put him over the required 270 electoral college votes.
From a trading perspective, the pattern of the night bore a striking resemblance to June 23 earlier this year, when the UK surprisingly voted to leave the European Union. As it did on that night, the eventual outcome dipped below a 10% probability before a late upturn.
In just three hours of trading, the two presidential hopefuls switched places on the market, with Clinton plummeting to below 10% and Trump soaring up above 90% before soon being confirmed as the president-elect. This has largely been attributed to Trump winning Florida, and his performance in other swing states such as Ohio, North Carolina and Pennsylvania.
Pascal Lemesre, Press Officer at Smarkets, said: “In one of the most popular betting events ever, traders have again called it wrong throughout the build-up. Not until the midway point of election night did Trump overtake Clinton for the first time on the market, and the Republican never looked back.
“The term prediction market should be used with caution. They do not predict the future, but suggest how good a chance either candidate has of winning the election. Just because Trump dropped as low 8% on the night does not mean he was out of it.”
Political betting attention now turns to the Italian constitution referendum on December 4, where Italy will vote on Prime Minister Renzi’s proposed constitutional reforms. A defeat for Renzi could be a blow for the Eurozone, already teetering from the impact of Brexit and the uncertainty of a Trump presidency.