(Bloomberg) -- As Trump Media & Technology Group extended a rally that’s more than doubled the share price since late September, it’s drawing in bullish options bets along the way.
On Thursday, investors bought call spreads and sold put spreads expiring in mid-November, after the US presidential election, according to market participants. The 50,000 call spreads would enable holders to purchase 5 million shares at $25, with their gains capped at $35. On the other side, put spreads traded that oblige the seller to purchase 4 million shares if they drop to $12 — around the low from late September — with their losses capped at $7.
Ultimately, the fate of Trump Media’s shares may be tied to the results of the Nov. 5 vote, which at the moment appears to be neck-and-neck. Polling averages from Real Clear Politics show Vice President Kamala Harris with 49% support, giving her nearly a two-point lead over former President Donald Trump, who’s at 47.2%. However, offshore gambling odds, which are prone to dramatic swings, show a 54% chance for Trump to return to the White House, according to PredictIt data as of 10:54 a.m. in New York.
Trump Media, which owns social media platform Truth Social, has been volatile since going public through a blank check deal in March. Shares climbed as high as $79.38 in their debut before crashing below $12 in September when insiders were able to sell stock for the first time. The stock’s 30-day realized volatility is 124, more than triple the level of Bitcoin and double GameStop’s figure of about 64, meaning the volatility could continue through next month’s election and the remainder of the year.
On Friday, shares were up 7.9% to $26.018, bringing the increase since Sept. 23 to more than 110%. There’s no way to know for sure if it’s a bet on the closely contested US Presidential election Nov. 5, though these longer-term trades are less common. Typically about half of the trading volume in the options is in the shortest-term contracts.
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