Trump Media (NASDAQ: DJT) stock has become a popular alternative gauge of the Republican candidate’s victory odds in the November elections.
Along with the sheer share price, short interest – the number of bets that DJT is headed for a collapse – has gained traction as an interesting metric. Once the latest available data is taken into account, it tells an interesting story.
Specifically, between September 30 and October 15, short interest in Trump Media stock rocketed by some 2 million from 11.4 million to 13.8 million, according to data published on Nasdaq on Thursday, October 24.
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Though such an increase is noteworthy, it was also accompanied by a vast increase in the average daily share volume, which is reported as just above 36.7 million.
The previous record-holding figure for the last 12 months covers the period with a settlement date of March 28, when it stood at 16.4 million.
Is there another reason for Trump Media stock short interest surge?
Though DJT short interest, stock price, and results on the various prediction markets are a contentious gauge of voter sentiment, the figures do much to demonstrate how uncertain the 2024 Presidential race is.
Looking purely at the short interest, as reported on Nasdaq, it steadily rose from late June – with a noteworthy uptick after Vice President Kamala Harris entered her campaign – but dropped in the second half of September as Trump’s chances again improved, only to rise again in October.
While such a setup might appear unintuitive once the figures on prediction markets are considered, investors should remember that DJT shares are not solely a political trade.
Trump Media stock has been trading upward – albeit with massive volatility shocks – and is 147.35% in the green in the last 30 days with a press time price of $34.95.
Such a price rise indicates many short sellers might have smelled blood in the water and positioned themselves for a likely upcoming correction.
Is the election less certain than most DJT stock trades anticipate?
The Trump Media share price and short interest dynamics simultaneously demonstrate why stock market performance is a controversial way of determining voter sentiment and the deep uncertainty of who will be the election winner.
Not only have the polls been equally close and prone to shifts, but the popular prediction markets – despite indicating a Trump sweep – tell a story of misdirection.
Polymarket, noted for placing the odds of a Republican victory at over 60%, started an investigation into some of its biggest ‘whales’ and found that one of the biggest Trump betters is, in fact, a French national.
Additionally, the discrepancy between the predicted winner and the popular vote outcome demonstrates the uncertainty of the results – and perhaps even cynicism about the electoral system.
While former President Donald Trump is in a decisive lead in the former, Vice President Kamala Harris has an almost equal advantage in the latter.
