Homepage / Technology / Crazy odds: These online traders bet on the chaos of Washington and the Trump administration
Amazon says this Prime Day was its biggest shopping event ever Kudlow says President Trump is 'so dissatisfied' with China trade talks that he is keeping the pressure on As stocks regain their footing, an ominous warning looms Goldman Sachs downgrades Clorox to sell, says valuation is 'unsustainably high' How Satya Nadella has spurred a tripling of Microsoft's stock price in just over four years Kudlow says economic growth could top 4% for 'a quarter or two,' more tax cuts could be coming The one chart that explains Netflix’s stunning comeback US housing starts plunge 12% in June to a nine-month low Aerospace titans Boeing and Airbus top $110 billion in orders at Farnborough Target uses Prime Day to its advantage, logging its 'biggest online shopping day' so far this year Billionaire Marc Lasry sees bitcoin reaching up to $40,000 as it becomes more mainstream and easier to trade These are the 10 US airports where you're most likely to be hacked Amazon shares slightly higher as investors await Prime Day results Wreck of Russian warship found, believed to hold gold worth $130 billion A bullish ‘phenomenon’ in bond market is weeks away from fading, top credit strategist says Stocks making the biggest moves premarket: MS, GOOGL, TXN, UAL, NFLX & more Twitter shares up 50% since late April means most upside priced in, analyst says in downgrade EU fines Google $5 billion over Android antitrust abuse Mortgage applications fall 2.5% as buyers struggle to find affordable homes America may not have the tools to counter the next financial crisis, warn Bernanke, Geithner and Paulson Investors are getting spooked as the risk of a no-deal Brexit rises EU expected to fine Google $5 billion over Android antitrust abuse Ex-FBI chief James Comey urges Americans to vote for Democrats in midterm elections Elon Musk apologizes to British cave diver following baseless 'pedo guy' claim Disney, Comcast and Fox: All you need to know about one of the biggest media battles ever Xiaomi shares notch new high after Hong Kong, mainland China stock exchanges reach agreement The trade war is complicating China's efforts to fix its economy European markets set for a strong open amid earnings; Google in focus Hedge fund billionaire Einhorn places sixth in major poker tournament The biggest spender of political ads on Facebook? President Trump Asian stocks poised to gain after Fed's Powell gives upbeat comments; dollar firmer Stocks are setting up to break to new highs Not all FAANG stocks are created equal EU ruling may be too little, too late to stop Google's mobile dominance Cramer explains how Netflix's stock managed to taper its drop after disappointing on earnings Airbnb condemns New York City's 'bellhop politics,' threatens legal retaliation Amazon sellers say they were unfairly suspended right before Prime Day, and now have two bad choices Investor explains why 'duller' tech stocks can have better returns than 'high-flying' tech names Elon Musk is 'thin-skinned and short-tempered,' says tech VC Texas Instruments CEO Brian Crutcher resigns for violating code of conduct Google Cloud Platform fixes issues that took down Spotify, Snapchat and other popular sites Uber exec: We want to become the 'one stop' transportation app 'What a dumb hearing,' says Democrat as Congress grills tech companies on conservative bias Amazon shares rebound, report says Prime Day sales jumped 89 percent in first 12 hours of the event How to put your medical history on your iPhone in less than 5 minutes Investment chief: Watch these two big events in 2018 Even with Netflix slowing, the market rally is likely not over Cramer: Netflix subscriber weakness debunks the 'sky's the limit' theory on the stock Netflix is looking at watch time as a new area of growth, but the competition is stiff Why Nobel laureate Richard Thaler follows Warren Buffett's advice to avoid bitcoin Rolls-Royce is developing tiny 'cockroach' robots to crawl in and fix airplane engines After Netflix plunge, Wall Street analysts forecast just tame returns ahead for the once high-flying FANG group Roku shares rise after analyst raises streaming video company's price target due to customer growth China is investing 9 times more into Europe than into North America, report reveals Amazon says US Prime Day sales 'so far bigger than ever' as glitch is resolved Netflix is on pace for its worst day in two years US lumber producers see huge opportunity, rush to expand San Francisco to consider tax on companies to help homeless Homebuilder sentiment, still high, stalls as tariffs, labor and land drive up costs Powell backs more rate hikes as economy growing 'considerably stronger' Netflix history is filled with big stock declines – like today – followed by bigger rebounds Intel shares get downgraded by Evercore ISI due to rising competition from Nvidia, AMD Petco aims to reinvent the pet store with something you can't buy online Genetic testing is coming of age, but for consumers it's buyer beware Tech 'FAANG' was the most-crowded trade in the world heading into the Netflix implosion, survey shows Netflix weak subscriber growth may indicate a 'maturity wall' that could whack the stock even more: Analyst This chart may be predicting the bull market's demise Wall Street says Netflix's stock plunge is a ‘compelling’ buying opportunity because the streaming giant ‘never misses twice’ Tesla sinks after Musk tweets, again Boeing announces new division devoted to flying taxis Stocks making the biggest move premarket: NFLX, UNH, GS, AMZN, WMT & more Deutsche Bank downgrades Netflix, but says big subscriber miss is not 'thesis changing' IBM is experimenting with a cryptocurrency that’s pegged to the US dollar North Korea and Zimbabwe: A friendship explained Virgin Galactic spinoff Orbit to launch rockets from the UK with space deal Artificial intelligence will create more jobs than it destroys? That’s what PwC says ‘Treasonous’ Trump and ‘Putin’s poodle:' Scathing headlines follow the Trump-Putin summit China’s fintech companies offer ‘enormous’ opportunity, investment manager says Trump's performance at summit with Putin was 'unprecedented,' experts say Walmart and Microsoft link up on cloud technology as they both battle Amazon European stocks seen mixed amid earnings; Fed’s Powell to address Congress How I knew I should quit my day job and run my start-up full-time: Viral website founder China's stocks have been trounced, but the trade war may ultimately be good news for those shares Billionaire tech investor Peter Thiel bets on crypto start-up Block.one Asian shares subdued open after mixed close on Wall Street; energy stocks under pressure Amazon cloud hits snags after Amazon Prime Day downtime Netflix isn't doomed by one quarter unless people start questioning the long-term investor thesis Tech stocks set to sink on Tuesday after rough evening for ‘FANG’ Netflix plummets after missing big on subscriber growth This wristband lets humans control machines with their minds The U.S. has a rocky history convincing Russia to extradite computer criminals Amazon suffers glitches at the start of Prime Day Jeff Bezos is now the richest man in modern history 'The United States has been foolish': Read Trump and Putin's full exchange Goldman Sachs recommends these 5 highly profitable companies — including Nvidia — to combat rising inflation Goldman Sachs releases 'tactical' stock picks for this earnings season Three red flags for Netflix ahead of its earnings report The bond market may be raising recession fears, but don't expect one anytime soon Cramer: Banks are 'making fortunes' but are still as hated as they were during the financial crisis Putin told Trump at summit: Russia never meddled in US election


Crazy odds: These online traders bet on the chaos of Washington and the Trump administration

After midnight on July 28, Tom Gill found himself watching C-SPAN. The 23-year-old quantitative trader was in the middle of an extracurricular bet — on the web site PredictIt — that Senate Republicans’ second attempt at overhauling Obamacare would fall short of the 51 votes needed to pass.

I could read body language and know that Sen. McCain seemed like he was going to vote no and kill the bill, which is what he did,” Gill tells CNBC.

McCain’s decisive, thumbs-down vote confirmed Gill’s suspicion — and netted him an estimated $3,000 to $4,000. When he parted ways with his Wall Street job shortly after, he decided not to look for work elsewhere. A month of Gill’s recent trading history shows roughly 5,400 transactions and $25,000 in earnings.

Gill is one of just a handful of people who bet on politics full time, but he’s part of a growing community of thousands who test their luck — or, as many maintain, skill — at guessing the outcomes of the ever-unpredictable administration of President Donald Trump.

The site, which launched in 2015, has hosted more than 250 markets related to the Trump administration. In Trump’s first year in office, PredictIt’s population of traders has grown to 80,000 from 50,000 as the White House deals political junkies a litany of new policy, personnel and, yes, Twitter events.

The platform hosts 10 markets related to the State of the Union alone. The odds favor Trump mentioning North Korea and Supreme Court Justice Neil Gorsuch, but not “fake news,” “amnesty” or his predecessor, Barack Obama.

“It’s a reality show,” says trader Derek Phillips, who has watched the platform’s community grow under the Trump candidacy and presidency. “Everybody is trying to figure out what’s going on in Washington.”

PredictIt is not the first platform to allow armchair pundits to bet on politics. InTrade — the go-to platform during the 2012 election — shut down in 2013 after the CFTC said certain activity constituted “off-exchange options trading” that it banned. Its users balked, and financial performance plummeted. The CFTC declined to comment beyond the 2014 letter.

PredictIt sprang up in InTrade’s wake. It incorporated through Victoria University in New Zealand, obtained a no-action letter from the CFTC, and struck deals with 83 research institutions, including the U.S. Federal Reserve, to provide data about how well prediction markets forecast correct outcomes.

Each winner-take-all contract costs $1, and traders can bet a total of $850 at any one time. A trader who bets the maximum amount on an outcome with 99-1 odds against it could reap about $85,000.

PredictIt CEO John Phillips says the relatively small amounts invested keeps insiders from profiting too handsomely off private information or subjecting the markets to manipulation.

“It’s really designed to prevent whales from coming in and either shifting the odds of something occurring or making a huge killing,” Phillips tells CNBC. But is it gambling? “Any stock market has an element of luck to it.”

Joe Schuman, a political science major, began betting on the 2016 primary races and poll numbers during his senior year at Massachusetts Institute of Technology. Schuman doubled his initial $400 investment, before losing it during the general election.

“My parents tell me it’s gambling, and they’re not happy that I do it,” Schuman told CNBC from his townhouse in Washington’s Columbia Heights. “But I actually think it’s investing.”

Schuman and his roommates, which include Capitol Hill staffers, think they’ve found a winning strategy centered around a politician with a bit more predictability: Vice President Mike Pence. Using sophisticated statistics software, Schuman has mapped out Pence’s Twitter history and now exclusively bets on how often he’ll tweet in a given week.

He declined to let CNBC take a picture of his slides, lest competitors copy his strategy.

So far, he has only put $30 behind the strategy, and he doesn’t plan to bet the ranch. But he has made $857, according to the balance in his account.

“I might get to the point where I’m making a few hundred dollars a week,” Schuman says. “If that’s my social spending money, then that’s great — beers are on me at the bar.”

Derek Phillips, who began trading politics full-time a year and a half ago after leaving his marketing job, calls PredictIt “unemployment insurance.”

“I try to make $1,500 every week, and as long as I’m able to do that, I’m able to pay all my bills and put some money into savings,” Phillips, who lives in Chapel Hill, N.C., tells CNBC.

Others are just trying to break even. Utah-based Mike Walbridge lost $6,000 in 2016 on the UK referendum and then-candidate Donald Trump‘s fundraising. Since then, he has recouped about $4,500 of his loss, scouring for news on Twitter to act fast on PredictIt’s markets, such as the Alabama special election in December.

In order to make money, Walbridge — and others — swear by one maxim: Bet with your head, not your heart.

“Even though I’m not a Trump fan, I’ve bought shares in his favor,” Walbridge says. “Because money is still money, right?”

CNBC’s Stephanie Dhue contributed to this report.

Source: Tech CNBC
Crazy odds: These online traders bet on the chaos of Washington and the Trump administration

Comments are closed.