Trump Media Stock Surges Over 30% After Assassination Attempt

Private prison stocks and crypto soar as investors prepare for Republican gains

• Trump Media & Technology Group (DJT) surged today after a failed assassination attempt.
• Betting odds indicate increased chance of Donald Trump taking the presidency.
• Prison and crypto stocks joined the rally as investors prepare for Republican gains.

Trump Media & Technology Group (DJT), the parent company of social media platform Truth Social, soared today, rising $10.62 per share, or 34.4%, following Saturday’s failed assassination attempt on the former President and likely 2024 presidential nominee Donald Trump.

DJT rose as high as $46.27—a nearly 50% gain—during this morning’s trading, marking the highest level traded for the stock since June 10. Through early afternoon, volume traded in DJT rose above 63 million shares traded. That is the highest volume on record for DJT, which merged with Digital World Acquisition Corp. Trump Media in March.

Betting odds reflect increasingly strong chance for Trump to take presidency

According to the PredictIt prediction market, betting odds for Trump winning the November election rose to 66 cents on Monday, up from 60 cents on Friday. President Biden’s odds decreased to 24 cents from 27 cents during the same period. Like stock exchanges, PredictIt uses a double auction market system where every bet for an event requires a counterparty bet in the opposite direction.

While we still have four months until the election, betting odds have outperformed traditional polling in predicting the winner of a presidency. Betting odds, which are based on a market, have increasingly become the favored predictor among traders for political bets. That increasing influence is perhaps more tangible today than ever.

Crypto and prison stocks join the rally as Republicans gain momentum to take Congress

Crypto assets also gained on Monday, with Bitcoin futures (/BTCN4) up 10% through afternoon trading. Crypto exchange operator Coinbase Global (COIN) rose $21.63 per share, or 9.92%.

Mr. Trump has championed Bitcoin and the broader crypto industry and is scheduled to speak at the Bitcoin conference in Nashville, Tennessee, later this month.

The increased chances for a Trump presidency are also boosting odds for Republicans down the ticket. Private prison operators gained on Monday, with Republicans more likely to reverse plans to reduce the use of private prisons in the United States.

GEO Group (GEO) rose 9% on Monday. The company operates detention centers and holds contracts with state governments and U.S. Immigration and Customs Enforcement (ICE). GEO has won several funding extensions for ICE this year, and contracts for the company are expected to increase under a Republican-controlled Congress.

Trading DJT as Trump odds increase

DJT trades with an implied volatility rank (IVR) of 59.3 and the Nov. 15 expiration, which occurs 10 days after the 2024 election, shows an expected move of +/-31 points, or 74% of the current stock price.

The Aug. 16 expiration, only 32 days out, provides a shorter timeline to trade the heightened IV of DJT’s options. If you believe that recent gains will hold, then selling a put spread could be beneficial as volatility settles following the assassination attempt.

Selling a 40 put for Aug. 16 and buying the farther out-of-the-money (OTM) put at 39 would give a trader a max profit of $58 and a max loss of $42 with a probability of profit (POP) of 46%.

Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. @fxwestwater

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