The odds of Trump's impeachment during his first term by the House of Representatives spiked above 60% on Tuesday on prediction market PredictIt. That's up from just 24% before reports surfaced on Sept. 18 about whistleblower allegations.
Traders on the platform currently see only an 18% chance that the president will be removed from office by the Republican-controlled Senate.
Investors use prediction markets to get a real-time barometer on the likelihood of certain political events, everything from Brexit and the 2020 election to impeachment. And unlike polls, which operate with a lag, the prediction markets respond instantly as developments unfold.
"The odds can change after literally a phrase or a tweet. To investors, it's potentially hugely valuable," said Flip Pidot, senior market analyst at PredictIt.
The impeachment fight has dramatically ramped up activity on PredictIt. Hundreds of thousands of trades are made daily in the most active impeachment market, up from tens of thousands per day prior to the recent scandal.
"We've seen quite an uptick," Pidot said.
Traders on PredictIt can buy shares for or against an event taking place. Those shares can then be traded, ideally by selling them for a higher price once an outcome looks more certain. Due to regulatory restrictions, no more than 5,000 traders are allowed to take a position in a given contract at a time. And those traders are limited to $850 per position.
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