With only 3 weeks left until the US election day on November 5, there has been a significant reversal in the situation. Some polls show that the Democratic candidate Harris's lead over the Republican candidate Trump has narrowed. In the gambling market, the latest odds indicate Trump's chances of winning have overtaken Harris. The market is starting to embrace the 'Trump trade' again.

At the same time, benefiting from the concept of a Trump victory, stocks are surging across the board. Trump's social media company $Trump Media & Technology (DJT.US)$ has soared in trading volume, with accumulated gains close to doubling since October.

In addition, $Phunware (PHUN.US)$This month, it has surged over 37%, rising nearly 20% again today. Cryptos publicly endorsed by Trump have collectively rebounded, with Bitcoin rising nearly 10% from its low point this month.

DJT stock price surges, is Trump's approval rating making a comeback across the board?

This year, the stock price of Donald Trump's media (DJT) has experienced large fluctuations, representing a barometer of Trump's election prospects and becoming a way for traders to bet on the election. After Trump's first debate with President Biden in June, and surviving an assassination attempt in July, the stock price soared.

However, following Harris replacing Biden as the Democratic candidate, engaging in the first face-to-face confrontation with Trump in September, and arguing logically during the debate, causing a continuous decline in Trump's support rate, DJT's stock price also declined. At the same time, due to the end of the stock lock-up period, the stock faced strong selling pressure, which also had a negative impact on the stock price.

However, less than a month away from election day, the situation changed dramatically. According to data from the well-known crypto prediction market platform Polymarket, Trump's support rate soared after reaching a 'tie' on October 3 and continued to rise. As of October 15, Trump's support rate had surged to 55.9%, significantly ahead of Harris' 43.6%.

Although there has been no dramatic reversal in national polls, Harris still leads by a slim margin. However, in key swing states such as Michigan, Wisconsin, and Pennsylvania, her lead is narrowing. Northwestern University professor and renowned data scientist Thomas Miller also stated that Trump's chances of winning have increased significantly in the past week, leading by two votes in the electoral college.

Analysts say that DJT has not recently received any bullish news about revenue growth or had its target price raised by analysts. Therefore, the direct reason for the stock's unusual movement at this time may indeed be the significant reversal in Trump's support rate.

As the election approaches, how should investments be positioned?

November 5th (the day after the first Monday of November in an election year) is the election day, and the election results will be announced that night. Since the United States presidential election follows the electoral college system, the actual presidential election takes place on the first Monday after the second Wednesday of December.

However, it is crucial to note that the results of opinion polls in the seven key battleground states are still different, and these states may have a significant impact on the crucial electoral college results. Therefore, it is still too early to draw conclusions about which candidate is more likely to win.

However, in the US stock market, trading surrounding the election is making a comeback and may intensify with the development of the election situation. Goldman Sachs stated that after investors unwound positions related to the US election this summer, traders are now starting to place bets on both sides again as the election approaches, especially with the soaring win rate of the "Trump trade," to hedge positions against the volatility risks brought by the election.

“Since this summer, the sensitivity of our Republican policy outperforming stocks to election events suggests that if Trump wins the presidential election and his PredictIt winning probability rises to 100%, these stocks may rise by 8%”.

Earlier, Goldman Sachs listed a basket of Republican policy outperforming stocks, including regional banks benefiting from deregulation, stocks with exposure to cryptocurrencies, energy and commodity-related stocks, as well as stocks related to localization and domestic security.

Additionally, during the previous round of Trump trades fermenting earlier this year, small-cap stocks $iShares Russell 2000 ETF (IWM.US)$ , cryptocurrencies such as bitcoin all performed well.

而从期权市场来看，在选举日当月到期的期权中，11月15日到期的期权单有非常多未平仓合约，都在分别为特朗普的当选投下“支持或反对票”。其中，call单占据上风，对该股看涨至35及25美元，未平仓量都在0.05 million张以上；put单则对该股看跌至12美元与7美元的水平，未平仓量在0.04 million张以上。

目前DJT的Implied volatility水平为270%（即预期该股一年内的波动幅度为270%），位于年内最高的百分位水平，也有大户通过跨式Options strategy.做多波动率。查阅上周该股的期权异动可看出，有大户斥资超15 million美元同时卖call与买call。

Editor/new