Since the beginning of October, the price of Donald Trump’s electoral victory on prediction markets has soared. On PredictIt, Trump’s electoral victory is at 54 cents, while the same event contracts are trading as high as 57 cents on Kalshi. Trump was trading below 50 cents on both platforms at the beginning of the month.
Since Sept. 23, the DJT stock price rose from $12.15 to $36.26 on Oct. 16. DJT is the Trump Media & Technology Group Corp, better known as the company that owns Trump’s social media platform, Truth Social.
Prediction market prices and DJT stock prices may be influenced by Trump’s electoral prospects, but the two are not directly linked, nor are they substitutes for political polls.
Prices across top prediction markets swung toward Trump as more traders bought contracts reflecting their belief that Trump would win the 2024 presidential election. Kamala Harris had a high point during her debate with Trump but has fallen in both polls and prediction markets ever since.
One pattern that repeats across her press appearances is Harris pivoting to attack Trump instead of differentiating herself from Biden.
Harris did this in her appearance on The View, where she said her administration “would be a continuation” of the Biden administration. On The Late Show with Stephen Colbert, Harris said she was “obviously not Joe Biden” but pivoted to say, “I’m not Donald Trump.”
She has specific policy ideas, like hard numbers on the child tax credit and a detailed economic plan. But Biden’s unfavorability rating is 16 to 20 points above his favorability rating. Tying herself to Biden’s unpopularity is a tactical mistake that could contribute to the prediction market surge against her.
The story behind DJT stock is more complicated.
DJT stock prices aren’t prediction markets or polls
DJT’s price movement has to do with the stock’s volatility and the potential value of Truth Social as Trump’s primary communications method if he regained the presidency.
Reporting by Barron’s has attributed the stock’s price increase to its attractiveness as a volatile trading instrument. The Barron’s article noted that DJT stocks were held “on average for less than two days.” That’s evidence that traders are buying DJT shares to flip them when the price spikes.
Tuesday, Oct. 15 was a particularly volatile day for DJT. The stock opened at $31.67 and reached a high of $33.45. That afternoon, DJT nosedived to a low of $25.77, a 23% drop. DJT closed at $27.16. It’s no wonder that day traders would be attracted to this stock.
DJT is also related to Trump’s electoral chances but is not determined by them. Truth Social has been Trump’s preferred method of broadcasting to his followers and the country since he lost the 2020 election. If he wins in 2024, Truth Social will be a more valuable platform because the world will be newly focused on the messages Trump sent from the social media app.
However, the recent increase in DJT is still lower than the company’s peak price of $97.54. The price peaked in March 2022, one month after Truth Social’s launch. Since then, Truth Social has largely remained a platform for Trump to broadcast rather than become a viable alternative to mainstream social media companies.
Neither prediction markets nor stock prices are polls. Even if some traders use stocks and prediction markets to support Trump, price changes do not determine the election’s outcome. Votes certified by secretaries of state, state governors, and Congress do.
