How to trade or invest around the US presidential election 2024
Learn how to trade or invest around the US election 2024. Find out how the markets might move and what assets you can trade or invest in.
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Call 0800 409 6789 or email helpdesk.uk@ig.com if you have any questions about trading or investing. We’re available from 9am to 5pm (UK time), Monday to Friday.
Contact us 0800 409 6789
Call 0800 195 3100 or email newaccounts.uk@ig.com to talk about opening an account.
Contact us 0800 195 3100
Get info fast via our instant help and support portal. Available for account queries, ProRealTime, product info and more.
Visit help and support for more information.
Get info fast via our instant help and support portal. Available for account queries, ProRealTime, product info and more.
Visit help and support for more information.
Call 0800 409 6789 or email helpdesk.uk@ig.com if you have any questions about trading or investing. We’re available from 9am to 5pm (UK time), Monday to Friday.
Contact us 0800 409 6789
2024 US Presidential Election polling
The Odds of Becoming President
Why trade or invest around the 2024 US election with us?
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Our analysts' stocks and markets to watch
- Stock market indices
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- Bonds
The stock market has a history of reacting, sometimes sharply, around major elections. According to a recent FT Michigan Ross poll, a Kamala Harris win would likely be welcomed by the broader market given her party’s generally pro-business and investor-friendly economic policies and the fact that she is more trusted to handle the economy.
However, certain sectors like fossil fuels and private prisons could face pressure under her administration. Meanwhile, a Trump re-election could spark initial unease and volatility across indices given his unpredictable governing style in the past.
Were Trump to cut taxes again, though, indices would likely rally. Sectors such as healthcare, infrastructure, and defence stocks could benefit under Trump.
Healthcare stocks face uncertainty headed into the election.
Harris supports expanding public health insurance options which could pressure private health insurers’ profits. Trump favours repealing the Affordable Care Act. The former president is tipped to make changes in laws and regulations that could have a huge impact on sales and profits for health insurers, hospitals, drug and medical-device companies.
Biotech and pharmaceutical companies are also expected to monitor the winning candidate's drug pricing reform plans closely. The sector could see volatility around the election before stabilising directionally after.
In the currency market, the US Dollar's value against other major currencies like the Euro, British Pound Sterling, Yen and Chinese Yuan is likely to see initial election-driven volatility.
A Trump win may spark safe-haven demand for the US Dollar, while a Harris win could weaken it. The direction of fiscal spending, trade policies, and transatlantic relations under the next administration could shape currency moves.
The oil and gas market would be watching the election closely. A Harris win raises the possibility of more stringent environmental regulations and a faster transition away from fossil fuels to combat climate change.
This regulatory pressure could weigh on oil and gas prices, at least initially. Meanwhile, Trump would likely entail more drilling-friendly policies that support commodity price strength.
The election could also impact agricultural commodities based on each candidate's trade policies, those of a Trump presidency probably being more restrictive with regards to China than that of Harris.
A majority of analysts seem to think that the Russia/Ukraine war might end sooner rather than later under Trump which may lead to a fall in the oil price as ample supply might flood the market, especially if China - the world’s largest oil importer - experiences lacklustre growth.
The direction of bond yields and prices probably only hinges to a minor degree on the election outcome and are instead driven by the Federal Reserve’s (Fed) monetary policy.
A Trump victory may lead to inflation concerns and higher Treasury bond yields, while a Harris win would likely reassure bond investors and keep yields low. The fiscal policy agenda and federal spending ambitions of the next administration will probably only to a minor degree shape market reactions.
How to trade or invest around the 2024 US election
- Research the market you want to take a position on
- Decide whether you want to trade or invest
- Open an account
- Search for your market on our web platform or app
- Place your trade
What to know about trading and investing around the US election
You can open a trading or investment account with us to get access to US election opportunity.
Investing
- Open our share dealing account to buy shares and ETFs. You can invest in a general investment account or an ISA
Trading
- Open our spread betting or CFD trading accounts to trade on leverage across indices, forex, shares, ETFs and commodities
- Open our US options and futures account to trade listed US options and futures, and take advantage of markets whether they trade up, down or sideways
When you invest, you buy and own shares or funds. You put up the full value of the trade. Remember that the value of investments can go down as well as up, and past performance is no indicator of future returns.
When you trade, you do so using leverage. This means you put up a fraction of the total position size to open your trade. However, this comes with risk – leverage means you can gain or lose money much faster than you’d expect, and you could even lose more than your initial deposit.
Recommendations on how to trade the US election
Markets are often volatile following a US election. Here are our tips for trading the increased volatility:
Keep up to date with the latest news
Stay informed with our award-winning trading platform's built-in tools, including news feeds from in-house experts and Reuters. Keeping abreast of rapidly developing stories reduces the risk of being caught off guard.
Our platform provides comprehensive resources to help you stay updated on market-moving news and events.
React in real time
Trade US indices round the clock and access extended hours on key US shares, exclusive to our clients. Our free trading app allows you to take positions on the go.
With 24/7 access and mobile capabilities, you can respond swiftly to market movements, ensuring you never miss an opportunity.
Ensure you don't miss key moves
Set alerts and see signals within our platform to notify you of crucial buy or sell price points. Customise preferences to receive notifications via email, SMS, or push notifications.
This feature enables you to capitalise on fast-moving markets, allowing you to take new positions or adjust existing ones within seconds.
Trade on positive or negative price movements
Use spread bets and CFDs to go long or short as opportunities arise. Go long if you expect markets to rise, and short if you anticipate a fall.
This flexibility allows you to potentially profit from both upward and downward market movements, adapting your strategy to changing market conditions.
Protect yourself against risk
Manage risk when trading leveraged spread bets and CFDs. While leverage requires only a margin deposit, it amplifies both profits and losses.
Implement risk management strategies like guaranteed stops to cap maximum risk, and consider hedging your portfolio or USD exposure with tax-free spread bets to protect against adverse market movements.
Prepare for election night volatility
Anticipate rapid market rotations and price swings during election results. Expect prolonged uncertainty if vote counting extends over days. Prepare for heightened volatility, especially during less liquid overnight sessions.
Monitor key technical levels and implement prudent risk management. Stay informed on polling data and adjust allocations strategically to navigate volatility and capitalise on election-driven market movements.
How do US elections impact the markets?
Historically, the S&P 500 has averaged a 7% rise during election years since 1952, though this is lower than the 17% average gain in the year prior to elections. The bond market has also shown strong performance, with the Bloomberg US Aggregate Bond Index averaging a 7% return in election years from 1976 to 2020.
However, it's important to note that factors like corporate earnings, central bank policies, and macroeconomic events often play a more significant role in market performance than elections alone.
Contrary to the Presidential Election Cycle Theory, which suggests weaker stock performance in the first two years of a presidential term, recent history has shown mixed results.
Analysis indicates that US equities have performed better under Democratic presidents, with a 13.8% nominal return compared to 8.9% under Republican presidents.
However, this should be interpreted cautiously, as external factors and unprecedented events can significantly impact market performance regardless of the party in power.
Interestingly, a divided government doesn't always hamper market performance, with data suggesting that the S&P 500 performed best under Democratic presidents without a Congressional majority.
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Fast execution on a huge range of markets
Enjoy flexible access to 13,000+ global markets, with reliable execution
Deal seamlessly, wherever you are
Trade on the move with our natively designed, award-winning trading app
Feel secure with a trusted provider
With 50 years of experience, we’re proud to offer a truly market-leading service
How can you hedge risk following the presidential election?
You can hedge risk following the presidential election by opening positions that will turn a profit if assets you own – such as currencies or stocks – start to lose money. With us, you can hedge against:
Dollar volatility
We offer over 80 forex pairs including EUR/USD and GBP/USD, enabling you to insulate yourself from currency risk
Share portfolio risk
You can go short on major indices and over 12,000 shares, so you can protect your entire portfolio from downside risk
Weekend movements
We’re the only provider that offers GBP/USD and the UK 100 on the weekend, so you can offset your risk whenever volatility arises
To start hedging, open a live account with us today. Or test out your theory risk free in a demo account.
Options strategies for the 2024 US election
Bullish? Bearish? Whatever-ish? You can trade whether markets are moving up, down or sideways with listed options.
Learn how different options trading strategies can give you the upper hand, whatever your outlook, with our four scenarios below.
- Covered call
- Long put
- Long straddle
- Iron condor
What if markets rally?
Possible strategy: Covered call
Bias: Neutral to slightly bullish
A Covered call strategy is a smart way to potentially enhance returns when you already own a stock and expect the market to rise moderately but not past the strike price.
How it works:
You own shares of a stock and then sell a call option on those shares. This means you’re giving someone else the right to buy your stock at a predetermined price (the strike price) before or on a certain date.
Max Loss: As you also hold the shares, there is a risk of losing money on that shareholding if the price moves against you. This is partially offset by the premium received for selling the call, but if the underlying price slumps to zero, you'd lose the whole investment (less the premium).
Max Profit: You earn the premium from selling the call option, which adds to your income. If the stock doesn’t rise above the strike price, you keep both the premium and your shares.
Why use it when you expect markets to rally?
When you expect a moderate increase in a stock’s price, a covered call strategy can be a great way to generate extra income. You still benefit from owning the stock as it appreciates, and the premium from selling the call option provides additional profit. This strategy is ideal for maximising returns in a slightly bullish market while managing risk.
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What if markets slump?
Possible strategy: Long put
Bias: Bearish
A Long put strategy is used to potentially enhance returns when you believe a stock’s price is about to drop.
How it works:
You buy a put option, which gives you the right to sell a specific stock at a predetermined price (the strike price) before or on a certain date.
Max Loss: The most you can lose is the cost of the option itself (known as the premium).
Max Profit: If the stock’s price falls significantly below the strike price, you could see substantial profits.
Why use it when you expect markets to slump?
When you anticipate a specific stock's price will fall, a long put strategy can be your best friend. It allows you to profit from the decline while keeping your risk limited to the premium paid. This makes it a useful tool for protecting your investments or even capitalising on a bearish market outlook.
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What if markets are unpredictably volatile?
Possible strategy: Long straddle
Bias: Bullish/Bearish
A Long straddle strategy could be your go-to move when you expect big market swings but aren’t sure which direction prices will go.
How it works:
You simultaneously buy both a call option and a put option on the same stock, with the same strike price and expiration date. This means you’re positioned to profit whether the stock price goes up or down.
Max Loss: The most you can lose is the combined cost of buying both options (the premium).
Max Profit: If the stock price makes a significant move in either direction, whether it’s a sharp rise or a steep drop, you stand to make substantial profits.
Why use it when you expect markets to be volatile?
When you expect markets to be highly unpredictable, with the potential for large price movements, a long straddle strategy allows you to capitalise on that volatility. Whether the market trends upward or downward, you’re covered. This makes it an option for times when you expect a major shift but can’t predict the direction, ensuring you’re ready to profit no matter how the market moves.
_Long_Straddle.png/jcr:content/renditions/rendition-1200.webp)
What if markets drift?
Possible strategy: Iron condor
Bias: Neutral
An Iron condor strategy can be a smart way to profit when you expect the market to stay calm and trade within a specific range.
How it works:
You create an iron condor by selling one out-of-the-money (OTM) call and one out-of-the-money (OTM) put while simultaneously buying a further OTM call and a further OTM put. This creates a range in which you can profit.
Max Loss: The risk is limited to the difference between the strike prices of the options, minus the net premium received. However, your potential loss is capped due to the protective options you’ve bought.
Max Profit: If the stock price stays within the range set by the sold options, you keep the net premium from selling the options, which is your profit.
Why use it when you expect markets to drift?
When you expect markets will be quiet and trading sideways with little volatility, an iron condor strategy allows you to earn income from the premiums received by selling the options. As long as the stock price stays within the defined range, you profit. This strategy is designed for low volatility environments where you don’t expect significant price movements, making it an excellent choice for generating steady returns in stable markets.
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US-listed options strategy guide
The 10 options strategies every trader should know:
A sleek showcase of 10 options trading strategies
Their individual applications and risk profiles
A clear explanation catering to all levels of experience
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