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Qatari Jet Episode Shows New Way to Profit from Trump’s Unpredictability

How Democrats and Republicans alike are making money on Trump’s unpredictability, if they’re paying attention.

Trump accepted a hotly contested Qatari luxury jet, and some traders profited as a result.


  • Prediction Markets

The White House officially accepted the $400 million luxury jet from Qatar, several news outlets confirmed early Wednesday afternoon. But not before traders at Kalshi, a federally regulated prediction market platform, placed over $62,000 in real money trades on a future event market asking “Will Trump accept the Qatari jet by June 1?”


Like many future event markets based on predicting Trump’s next move, the Qatar jet market was volatile over the six days it was live. That also meant ample opportunity for savvy traders to get in at a good price–and watch it pay off. 


Sign up at Kalshi to trade real money on political futures markets. 


Why were people betting on when Trump would accept the Qatari luxury jet?

Kalshi is a peer-to-peer exchange offering event contracts around outcomes of future events. The platform added the market “Will Trump accept the Qatari jet?” on May 15, just four days after reports first surfaced about the Qatari royal family’s extravagant gift. The market makers set the price around 25 cents, implying a probability of around 25% that Trump would accept the gift before the June 1 market deadline. 


Despite its title, the Kalshi market wasn’t actually based on the question of whether or not Trump would accept the plane. The question was more about the timing of the gift’s acceptance. Kalshi’s initial Qatari-jet market asked whether or not the airplane would be accepted before June 1. Users could purchase either “Yes” or “No” contracts, priced between $0.01 and $0.99 with each correct contract paying out $1. 


President Donald Trump had expressed his eagerness for the U.S. to accept the luxury gift, which he would use as Air Force One and then house at his presidential library after his term. Amidst pushback from lawmakers from both parties who saw the gift as potentially illegal or unethical and the White House’s persistent claim that it was a legal and beneficial offer, Kalshi’s odds fluctuated dramatically in its six days of existence. 


After launching at $0.25 on May 15, the next few days saw the odds hovered around 50% or a $0.50 contract price. Odds on May 19 and 20 were particularly volatile, fluctuating between 28% and 62% before dropping down around 15% by the end of Tuesday, where they remained until traders caught wind of the acceptance just after noon on Wednesday.


On the morning of May 20, Kalshi added another option to the market, asking whether or not the plane would be accepted before July 1. That market traded much higher (around 74%) apart from a brief deep dip to 28% at midnight on May 21. Those who purchased “Yes” contracts at that price were able to profit potentially on both markets once the news was confirmed later that day.  


"The secretary of defense has accepted a Boeing 747 from Qatar in accordance with all federal rules and regulations," Sean Parnell, chief Pentagon spokesman, said in an official statement that several publications quickly reported.


By the time the first news outlets published stories of the White House’s acceptance, Kalshi’s jet markets for “Yes” by June 1 and July 1 had spiked to over 80% and closed shortly thereafter at 1:05 p.m.  

Trading volatility, prediction markets style

Prediction markets, or future event contracts, allow ordinary people as well as seasoned traders to potentially cash in on political predictions and most anything else trending in the news. Trump’s unpredictability can make some of these markets volatile, but it can also present profitable opportunities for those who have strong hunches about what he’ll do next. 


That seemed to be the case here, as some Kalshi users in the “by June” market left comments saying that they believe the U.S. will accept the plane, but not as soon as the start of June. Like much of what we see in the news these days, the event was unprecedented, making the potential timeline of the event more unpredictable. Also, for those following the news, there were more than a few reasons to believe the gifting could be delayed or derailed entirely

Negative news drove Qatar jet gift acceptance odds down to 15%

As soon as word of Qatar's gift offer surfaced, both Republican and Democratic lawmakers began to question the legality of accepting such an expensive gift from a foreign government. Some critics of the plan also noted the significant cost of upgrading the plane to meet Air Force One requirements. Others have said accepting the lavish gift could give the appearance of bribery and corruption.


The Constitution states that the U.S. may not accept “present, emolument, office, or title, of any kind whatever” from any “king, prince or foreign state” without Congressional approval. Trump and members of his administration had said that accepting the plane would save taxpayers money and compared the Qatari gift to the U.S. accepting the Statue of Liberty from France. But that gift was approved by Congress with a joint resolution in 1877. 


Adding to that, House Democrats filed a resolution on May 14 instructing Trump to either turn down the gift or get congressional approval. Those backing “Yes” were banking on Trump ignoring that request


Despite Trump’s unpredictability, traders drove the “Yes by June 1” contract prices down so they were trading between $0.14 and $0.16 up until minutes before the White House announcement. That means the consensus of traders on the site saw the likelihood of Trump announcing the gift by the end of May as being around 15%. 


Those who bought “Yes” in that price range would have turned $100 in contracts into somewhere between $625 and $714

An NPR report on May 19 tipped off some traders

The brief Kalshi odds surge overnight on May 20 favoring acceptance of the gift prior to June 1 may have been in response to a May 19 NPR report that the Qatari “flying palace” was already in the U.S. 


NPR reported that the jet was stationed at the San Antonio airport in Texas, awaiting inspection and an overhaul by a defense contractor. According to the report, the Air Force would take over ownership of the plane after the final paperwork was approved and submitted. What was still not clear was the timeline and potential obstacles to the U.S. officially accepting the gift.


Those who took that report to heart, and banked on Trump’s unpredictability, were able to cash in for a nice profit.  


Love to follow the news and make predictions of your own? Trade on political event markets at Kalshi today! 

author

Mike Breen



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