LONDON, November 9, 2016 /PRNewswire/ --
One customer on the Smarkets betting exchange has pocketed £165,000 after successfully trading the US presidential race.
On a remarkable night in America, Republican candidate Donald Trump won the White House race having been given a below 10% chance by the exchange midway through election night.
From a trading perspective, the pattern of the night bore a striking resemblance to June 23 earlier this year, when the United Kingdom surprisingly voted to leave the European Union.
As on that night with the Leave vote, Trump's implied probability dipped below the 10% mark as traders doubted his chances before it all started to go his way and prices shot up.
Pascal Lemesre, spokesperson for Smarkets, said: "In one of the most popular betting events ever, traders have again called it wrong throughout the build-up, not putting Trump in front until it was clear he was outperforming expectations."
Both Trump and Clinton knew the importance of winning Florida and it was the Republican's continued lead as the Sunshine State votes came in, coupled with a surprising showing in Virginia, that began to tip the scales in his favour.
From there, Trump continued to perform well in other swing states like Ohio, North Carolina and Pennsylvania and also did far better than expected along the rust belt in states like Michigan and Wisconsin.
In just three hours of trading, the two presidential hopefuls switched places on the market, with Clinton plummeting down below 10% and Trump soaring up above 90% before soon being confirmed as the president-elect.
Smarkets CEO Jason Trost added: "This is why 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 the citizens of Italy are voting 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.
Then in April France will see their Presidential Election, for which the far-right National Front's Marine Le Pen is a strong contender. Le Pen hopes to harness the same populist forces that helped Trump to victory.
Notes to Editors
Launched in 2010, Smarkets is one of the world's leading betting exchanges that makes trading on events secure, efficient and exciting. Forged from trading principles found within the financial markets, Smarkets brings intelligent betting to the forefront of an age-old industry.
- Headquartered in London, Smarkets has processed over £3 billion worth of transactions for customers across the company's licensed and regulated markets and continues to grow rapidly because of its industry-leading odds and commission on sporting and political markets.
- The company was founded in 2008 by a team of finance and software engineering professionals and is backed by T-Venture and Passion Capital.
- The platform offers unparalleled value that combines pioneering technology with a focus on transparency and treating the customer fairly.