Author: Alexander Osipovich, The Wall Street Journal; Compiled by 0xxz@Golden Finance
The mysterious trader known as the "Trump Whale" is set to pocket nearly $50 million in profits after making a series of bold bets tied to the presidential election.
Not only did he think Donald Trump would win the presidency, he also bet on Trump winning the popular vote — an outcome many political observers considered unlikely. The trader, who calls himself "Théo," also bet on Trump winning "blue wall" swing states like Pennsylvania, Michigan and Wisconsin.
Now, Théo is about to reap a huge payoff. He used four anonymous accounts to place his bets on the cryptocurrency betting platform Polymarket. Although he declined to identify himself, he has been in contact with a Wall Street Journal reporter since an Oct. 18 article drew attention to his bet.
In dozens of emails, Théo said his bet was essentially a wager on the accuracy of polling data. He describes himself as a wealthy Frenchman who worked as a trader at various banks and told the Journal that he began applying his math knowledge to analyzing U.S. polls this summer.
He believes the polls overstate Vice President Harris’s approval rating. Unlike most armchair political commentators, he put his money where his mouth is, betting more than $30 million that Trump will win.
As the results rolled in on Tuesday night, Théo was in a jubilant mood. He said he woke up in the middle of the night in France to check the results.
Trump's strong showing in Florida bodes well for his chances of winning the popular vote, writing, "I feel very happy and confident in my bets!"
In a private message to a reporter before Election Day, Théo predicted that Trump would receive either 49% or 50% of the vote nationwide, defeating Harris. He also predicted that Trump would win six of the seven battleground states.
As of Wednesday afternoon, analysts were predicting that Trump would win the popular vote, with nearly 72 million votes to Harris' 67.1 million, though millions of votes in California and other states were yet to be counted. Betting markets see Trump winning the popular vote as a near certainty.
Betting markets suggest that Trump is also expected to win all seven swing states. Michigan, where Théo thinks Harris could win, was projected as a Trump win on Wednesday.
The Wall Street Journal has confirmed that Théo was the trader behind Polymarket accounts that systematically bought bets on Trump winning. Polymarket confirmed some of his claims, saying the person behind the bets was a Frenchman with extensive trading experience and a background in financial services.
Théo said he bet on Trump with his own money with the goal of making a lot of money and that he had "absolutely no political agenda." The Wall Street Journal could not determine whether these claims were true. The Wall Street Journal also could not rule out Théo's links to any political organizations or Trump allies.
In his emails and Zoom conversations with reporters, Théo repeatedly criticized U.S. polls. He was particularly critical of polls conducted by the mainstream media, which, in his view, were biased toward the Democratic Party and often produced anomalous polling results in favor of Harris.
"In France, it's different!! The credibility of the polls is more important: they want the results to be as close to reality as possible. The culture is different in this regard," he wrote.
Théo shared a table of numbers compiled from RealClearPolitics polling averages that showed Trump doing well in swing state polls in 2020. Given how close the polls are in 2024, Théo reasoned that if Trump can have a similarly strong performance, he will easily take the lead.
Théo said the polls fail to account for the "shy Trump voter effect." Either Trump supporters are reluctant to tell pollsters they support the former president, Théo wrote, or they don't want to participate in the polls.
To address this issue, Théo believes pollsters should use what is known as a neighbor poll, which asks respondents which candidate they expect their neighbors to support. The idea is that people may not want to reveal their preferences, but they will indirectly reveal their preferences when asked to guess who their neighbors plan to vote for.
Théo cited the results of several polls released in September that used both neighbor polling and traditional voting methods. Those polls showed Harris's support was several percentage points lower when respondents were asked who their neighbors would vote for than when they were asked directly which candidate they supported.
To Théo, this was proof that pollsters had underestimated Trump's support again. The data helped him place his bet that Trump would win the popular vote. At the time Théo placed his bet, bettors on Polymarket gave Trump less than a 40% chance of winning the popular vote.
As Théo celebrated the results on election night, he revealed another part of his analysis of why his bet worked. In an email, he told The Wall Street Journal that he had commissioned a survey from a large pollster, which he declined to name, to measure the neighborhood effect. The results, he wrote, were “shocking and in favor of Trump!” Théo declined to share the findings, saying his agreement with the pollster required him to keep them confidential. But he argued that U.S. pollsters should use the neighborhood method in future surveys to avoid another embarrassing blunder. “If the latest polls had measured the neighborhood effect, public opinion would be much clearer,” Théo said.
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