The Post-Trump Victory Trade

The Day After

I wrote a post on ZeroHedge this morning (“Trump Victory”) which included a number of reactions to Trump’s astonishing victory last night, when Trump became the first President to win in non-consecutive terms since Grover Cleveland, 127 years ago. Here, I’ll confine myself to some market-related comments.

The Betting Markets

In a post here a couple of weeks ago, I wrote about betting on the election.

I mentioned that I had Trump to win at 44 cents on PredictIt, and a couple of bets on a new site, Kalshi:

1. Trump to win Wisconsin at 52%.

2. Republicans to win the White House and majorities in both the House and Senate at 47%.

After that post, I added a few additional bets, including “Kamala No” on PredictIt, when that dropped to 48 cents. I cashed out of my PredictIt bets at 97 cents and 98 cents, respectively, today, for gains of a little over 100% before PredictIt’s 5% exit fee.

Trump won Wisconsin, and while all the House races haven’t settled yet, it looks like our Republican sweep bet will cash too.

Stocks Benefiting From The Trump Win

Six names we have positions in posted double-digit gains the day after Trump’s win:

1. Centrus Energy (LEU 15.02%↑). This is a uranium name we opened a call spread on last week. 

2. Robinhood Markets (HOOD 19.63%↑). That was the crypto-related name in our Nuclear Option post above, and our trade was buying the $32 strike calls on it for $2.30. Those calls were trading at $4.90 as of Wednesday’s close. 

3. Bit Digital (BTBT 17.14%↑). That’s the Bitcoin miner with operations in Ethereum staking and AI that was one of our two lottery tickets in this post in September. 

4. Tesla (TSLA 14.75%↑). We opened another trade on Tesla earlier this week—that was the less-contrarian trade in this post. Our Tesla trade is a call spread which will generate a 300% gain if Tesla closes above $350 per share at the end of next year. 

5. Emergent BioSolutions (EBS 0.00%↑). Our trade here was buying the $9 strike calls expiring on December 20th for $2.05. EBS beat earnings on Wednesday and was up 24.46% after hours. 

6. Powell Industries (POWL 18.13%↑). Our most recent trade here was a call spread betting on POWL being above $300 by next May. It closed at $347 today. 

Stocks That Tumbled The Day After

1. Super Micro Computer (SMCI 0.00%↑). That was the contrarian trade mentioned in the same post with Tesla above. Our bet was that most of the bad news was in the rearview, so there was a good chance the stock would bounce after earnings on Tuesday. Unfortunately, while there wasn’t much bad news on their conference call, they didn’t offer any timeline about getting a new auditor and the stock plummeted on Wednesday.

2. Rivian (RIVN 0.51%↑). This EV maker was in a number of analysts “Harris basket” of stocks, while they had Tesla in their Trump baskets, and it plummeted about 9% after Trump won. We opened a position in this one back in April, buying the $15 strike calls expiring in January for $1.84. Fortunately, we sold half of those calls at $5.55 in July, for a 202% gain, so we are playing with the house’s money on this one. And the company reports earnings after the close on Thursday, so maybe they’ll have some good news then. 

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Looking Ahead 

We're researching a few ideas that could outperform in second Trump term. If you'd like a heads up when we place a trade on them, feel free to subscribe to our trading Substack/occasional email list below. 

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