A Trump Trade Arbitrage
Election cops, HSR filings, structured credit integration, TXSE listing standards, AI and CPAs.
This is not investment advice, but these days there are a number of platforms where you can bet on the US presidential election. Offering election contracts used to be a violation of US law, but a recent court case seems to have changed that, though this is also not legal advice. On the other hand, these platforms do seem to violate the law of one price. As of about noon today, you could buy a Donald Trump contract — one that pays off $1 if he wins the election — for about $0.49 on Kalshi, and you could sell it for about $0.53 on Polymarket, collecting a free four cents.
I am sure there are some fees that I am not accounting for, and I don’t know how good liquidity is on any of these places; I am not telling you about this because arbitraging prediction markets on the most high-profile event in the world, after reading about it in a newsletter, is likely to be a good trade. I am telling you about it because (1) people keep emailing me and (2) there are Elon Musk angles. Forbes reports: