Investors bet hundreds of millions of dollars in contracts, minutes before the President announced on Monday that the US .
According to the BBC, trading volume spiked about fifteen minutes before the President’s social media post announcing the move.
The price of oil fell sharply after the announcement, falling 14% within minutes. In fact, investors who bet on this unexpected move will have already made money.
Some market analysts argue that this unusual activity raises the possibility that bets were placed with prior knowledge of the decision.
The BBC contacted the White House for comment, but a spokesman told the Financial Times that it does not “tolerate any government official illegally profiting from confidential information”.
Market turmoil and geopolitical tension
Global financial markets have been roiled by the conflict in the Middle East, with share prices falling as oil and gas costs soared, but in several cases hope of a possible end to the war has led to volatile swings, with oil falling sharply and stock markets rising.
On Saturday, Trump threatened to “wipe out” Iran’s power plants if they did not reopen the Strait of Hormuz, through which about 20 percent of the world’s oil and natural gas normally passes, within 48 hours.
Markets were closed for the day but fell sharply across Asia when they reopened on Monday morning, while the price of oil began to rise.
However, at 07:04 (11:04 GMT) on Monday, before US markets opened for the week, the president posted on his Truth Social platform that Washington had held “VERY GOOD AND PRODUCTIVE DISCUSSIONS” with Tehran on a “FULL AND TOTAL RESOLUTION” of hostilities.
Immediately, stocks rallied and the price of oil fell to $84 (£63) a barrel on the US benchmark.
Since then, observers have closely scrutinized what happened in financial markets in the minutes leading up to the president’s announcement.
At 06:49 ET, investors placed 734 bets on WTI crude oil contracts on the New York Mercantile Exchange (Nymex).
A minute later, that number had jumped to 2,168. That equates to about $170 million.
The same pattern is seen among investors buying contracts for Brent, the other major oil benchmark. Between 06:48 and 06:50 (East Coast Time), trading volume increased from 20 to over 1,650. This corresponds to approximately $150 million worth of contracts.
Questions about possible exploitation of confidential information
The figures for previous Mondays show that there is usually much less trading at that time of day.
Similar trading was also seen on Monday in futures for the S&P 500, Euro Stoxx 50 and other markets.
That means investors bet on a rise in the value of the biggest companies listed in the US and Europe just minutes before Trump’s announcement.
“This definitely looks anomalous,” says Mukesh Sahdev, chief oil analyst at XAnalysts.
“At the time, there were no indications that serious talks were taking place between the US and Iran. So the fact that so much money was invested in the fall in the price of oil raises questions.”
The timing of the bets has raised questions about whether they were made with prior knowledge of the president’s announcement.
“Just before he posted on social media, a number of people took out contracts that would have allowed them to take advantage of the drop in oil prices,” said Rachel Winter, a partner at wealth management firm Killik & Co.
“So there has been some speculation about insider trading. We don’t know if this is true, but we hope that some investigation will be conducted on this,” he added.
Later on Monday, the Iranian government denied any talks had taken place, calling them “fake news”. Oil prices rose again after these comments.
In a post on X, the speaker of Iran’s parliament, Mohammad-Bagher Ghalibaf, said that “fake news is being used to manipulate the financial and oil markets and escape the quagmire in which the US and Israel are trapped.”
The BBC contacted the US regulator, the Commodity Futures Trading Commission, as well as the UK’s Financial Conduct Authority.
This is not the first time that US foreign policy has been linked to intense betting activity.
In January, bets soared on Polymarket, a cryptocurrency-powered prediction platform, as punters bet that Venezuelan President Nicolas Maduro would be ousted from power by the end of the month. A few hours later, he was arrested by US forces.
One user won more than $436,000 from a bet of $32,537.
