US presidential election 2020

There aren’t two choices this election – there are 17,000. Learn how you can trade the US presidential election with our huge range of markets.

Start trading today. Call 1800 601 799 or email newaccounts.au@ig.com. We’re here 24 hours a day, except from 9am to 7pm Saturdays (AEDT).

Contact us: 1800 601 799

Start trading today. Call 1800 601 799 or email newaccounts.au@ig.com. We’re here 24 hours a day, except from 9am to 7pm Saturdays (AEDT).

Contact us: 1800 601 799

Why trade the US election with us?

Trade AUD/USD, Australia 200 and more

Go long or short on a range of currency pairs and global indices, and access our unrivalled range of weekend markets, including Wall Street and EUR/USD

Risk management

Protect your capital with guaranteed stops that only incur a fee when triggered1

Choose from a range of price alerts

Stay informed of market movements with percentage and point-based price alerts – exclusive to our clients

Trade pre- and post-market with extended hours on US shares

Take advantage of market movements and trade US share CFDs 16 hours a day, including Amazon, Apple and Facebook

Tips for trading the US election

Markets are often unpredictable around a US election – especially if the result is uncertain. Here are our tips for trading the increased volatility:

  1. Keep up-to-date with the latest news
    It’s important to keep up to date with the latest news and opinion polls to reduce your chances of being caught out by the result. Our award-winning trading platform has a range of in-built tools to help you,2 including news feeds from our in-house experts and Reuters.
  2. React in real time
    With us, you can trade US indices round the clock – including on election day. You’ll also get extended hours on key US shares – which you can trade as and when results come in, state by state. With our free trading app, you’ll be able to react even when you’re out and about.
  3. Ensure you don't miss key moves
    You can set alerts and signals from within our platform to notify you of key price points to buy or sell, so you never need to be caught out by fast-moving markets. You can change your preferences to receive these alerts by email or push notification – and you can take a new position or alter an existing one in seconds.
  4. Trade on positive or negative movements
    When you take a position with us, you’ll be able to go long or short whenever opportunity presents itself by trading with CFDs. You’d go long if you expect markets to rise, and you’d go short if you expect them to fall.
  5. Protect yourself against risk
    Even if you’re confident in your own research and analysis, there could still be surprises. Cap your maximum risk by placing guaranteed stops on your positions,1 and hedge your portfolio or USD exposure with CFDs.

When is the result expected?

The result of the US election might not be known until days or even weeks after polls close. Because of the large number of postal ballots voters this year, it's expected that some key states could take weeks to fully count their votes. Even after a definitive outcomes arrives, it could be contested, potentially leading to a trial in the Supreme Court.

Why is the result delayed and how could markets be affected?

Market commentary by IG Senior Market Analyst Joshua Mahony

The lack of any standout outperformer in the US election has pushed us into somewhat uncomfortable territory, with the wealth of mail-in ballots seen in the wake of the pandemic meaning that there are still enough uncounted votes left to swing the final outcome.

The common perception is that those mail-in votes will overwhelmingly benefit Joe Biden, hence Trump’s decision to push for the US Supreme Court to rule out any ballots received beyond election day. While Trump will hope that his recent appointment of Amy Coney Barrett will help sway any decision-making, there are doubts over the Court’s willingness to throw out potentially valid votes.

Between the expected period of vote counting, and legal challenges from Donald Trump, it is clear that we will see significant uncertainty play out over the days ahead. The volatility seen in stocks does reflect this uncertainty, yet it appears that markets have remained somewhat stable despite the likely lack of any blue or red wave that would unlock a swift decision on stimulus.

USD/CNH is one of the best gauges of sentiment over who will become the next president, with the Biden polls having sparked significant yuan upside. The USD/CNH weakness in the early hours of 4 November does highlight the feeling that Biden could ultimately end up as the next president of the United States.

How could each candidate affect market sentiment?

All US markets tend to experience increased volatility in the run up to a presidential election, including USD forex pairs, indices and commodities. That’s because many investors will attempt to lock in positions before the result is announced – using polls to gauge public sentiment. The aim is to take full advantage of the price moves that occur when the country’s political direction is confirmed.

The two candidates are very different in their approach towards information and how they share it. At the top level, early indications suggest that the following could be on the cards if one of these two main candidates win:

Donald Trump

A Trump win could see an escalation of the trade war, potentially causing problems for US exporters and having a negative impact on the value of the dollar. However, this effect could be offset by reassurances that tax cuts and deregulation will continue – boosting the US economy.

Trump is known to go off-script during speeches and he often takes to Twitter to voice his opinions, causing markets to react, especially when individual companies are called out. Shares can rise and fall immediately after Trump’s tweets, which can also lend itself to an increased sense of market volatility.

Trump has also taken to Twitter to criticise interest rates, stating that high interest rates make life difficult for American manufacturers. That’s because higher interest rates push the strength of the dollar up, making exports more expensive. Any Tweets from Trump that indicate that USD is too strong can cause the price of currency crosses like AUD/USD and EUR/USD to rise.

Joe Biden

A Biden win could see tensions in the trade war cool down, providing a potential boost to US exporters and the dollar. However, these effects could be offset by tax increases for high-income households, and more limited deregulation.

In terms of rhetoric, Biden is generally more restrained than Trump, and his speeches and Tweets often speak of a spirit of togetherness. That’s not to say that he doesn’t have his fair share of gaffes, however, which his presidential opponent quickly seizes on. Biden has been given the moniker ‘Sleepy Joe’ from Trump, on account of his supposed lack of energy.

That said, Biden already has more years’ experience in the West Wing than Trump does, having racked up eight years as Obama’s vice president. His increased experience could bring with it a larger degree of certainty in the markets by traders and investors.

Steps to trading the US election

  1. Choose a trading method
    CFDs enable you to speculate on the price of an asset without taking direct ownership of it. This gives you the flexibility to go long if you think an asset’s price will rise, or short if you think it will fall.

    However, if you prefer to buy shares outright, you can do so with our share trading service. Owning shares enables you to profit from increasing share prices, as well as through any dividend payments issued by the company.
  2. Select a market
    You can trade the election by speculating on markets such as indices, shares and forex pairs. The US 500, AUD/USD and US shares all tend to move in the run-up to polling day, and often continue to move in the fall out of the result – meaning there is opportunity to profit from the election
  3. Open an IG trading account
    You can open an account with us in just a few minutes, and there’s no pressure to add funds until you want to place a trade.
  4. Be ready to react to US election news
    With our in-platform news feeds from our expert team and Reuters, plus our range of trading alerts and signals, you never need to be caught out by breaking news stories.
  5. Log in and place your trade
    Once you’ve followed the previous steps, you’re ready to log into your account and take a position on the US election.

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Open an account now

Open an account now

Fast execution on a huge range of markets

Enjoy flexible access to more than 17,000 global markets, with reliable execution

Trade seamlessly, wherever you are

Trade on the move with our natively designed, award-winning trading app

Feel secure with a trusted provider

With 45 years of experience, we’re proud to offer a truly market-leading service

Start trading now

Log in to your account now to access today’s opportunity in a huge range of markets.

Start trading now

Log in to your account now to access today’s opportunity in a huge range of markets.

When is the US election?

The US election is scheduled for Tuesday 3 November 2020, when all 50 states and Washington DC will cast their votes. The vote spans six different time zones, so the first exit polls will be available at around 11pm (EST) when West Coast voting closes. In Australia, that will be around 3pm (AEDT) on Wednesday 4 November 2020.

The election is likely to create opportunities for traders to profit, with price movements expected across a range of forex pairs, indices and commodities in the run-up to polling day. Volatility related to the election could continue until congress certifies the result on Wednesday 6 January 2021, or even until the winner is inaugurated on Wednesday 20 January 2021.

How can you hedge risk during the presidential election?

You can hedge risk during 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 IG, you can hedge against:

Dollar volatility

We offer over 80 forex pairs including AUD/USD and EUR/USD, enabling you to insulate yourself from currency risk

Share portfolio risk

We enable you to go short on major indices and over 13,000 shares, so you can protect your entire portfolio from downside risk

Weekend movements

We offer an unrivalled range of weekend markets, including USD/JPY, GBP/USD and Wall street, so you can offset your risk whenever volatility arises

Markets to watch

It’s important to remember that the coronavirus pandemic is likely to create significant volatility over the election period. A spike in cases could see US indices and the dollar fall in value, as investors move to price in a reduction in consumer spending and economic output. Conversely, a reduction in the number of cases could see both indices and the dollar rise in value. Whichever way markets move, you can be ready to take advantage with an IG account.

Here are some of the financial markets that are likely to be impacted by the US presidential election.

Forex

US dollar crosses, including AUD/USD, USD/JPY and GBP/USD are likely to be volatile – as investors move to price in the effects of the probable winner’s foreign policies.

Stocks and indices

US stocks and indices including the US 500 and Wall Street are expected to experience major price moves, with each candidate favouring a different approach to international trade.

Commodities

The prices of commodities including oil and gold are likely to fluctuate, in line with expectations for the country’s economic direction over the next four years.

Popular markets

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Prices above are subject to our website terms and conditions. Prices are indicative only.

How will markets react to the different candidates?

Market commentary by IG Senior Market Analyst Joshua Mahony

Stocks

Markets hate uncertainty, and historically the perception has been that a new president might bring policies that could be harmful for stocks. This happened in 2016 when analysts were confident that a Trump presidency would spark a market collapse.

But, we are now seeing that same fear creep in as people consider a Biden presidency and the potential uncertainty it could cause. Biden is openly more left-leaning, and his policies are expected to be geared towards human needs rather than those of investors and traders.

This sentiment isn’t helped by suggestions that Biden would reverse Trump’s tax cuts, and it is likely that markets will rise alongside the potentially increased chance of a Trump victory as we approach the election.

USD

The value of a currency is supposed to reflect the health of an economy and its future prospects. Many are expecting Biden to be less focused on the markets than his Republican opponent, so the dollar could weaken in the event of a Biden victory.

However, this effect could be offset if Biden is able to improve relations between the US and China after years of market anxiety. In this scenario, it would be the Chinese yuan which may benefit the most, with the trade war having sparked huge upside for USD/CNH.

Keep in mind that if the wider markets fall on a Biden victory – including US stocks and indices – the dollar would likely rally in the short-term to reflect a risk-off move as investors turn to USD.

Gold

The prospect of a more expansive fiscal policy under Biden, and from a government which is happy to embark on substantial spending programmes, could provide a boost to precious metals.

There’s a caveat here too, because in the past precious metals have also followed the same patterns as the stock markets during times of crisis. So, any collapse in equity markets that may come from a change at the White House could drag gold lower in the immediate period.

Plus, while Trump has finally seen the kind of stimulus he would have hoped for, a Biden win could result in a more substantial stimulus package if the Democrats gain a foothold in Congress.

Choose IG as your extended hours trading provider

It’s free to open an account, and you don’t have to fund or trade until you’re ready.

Choose IG as your extended hours trading provider

It’s free to open an account, and you don’t have to fund or trade until you’re ready.

Choose IG as your extended hours trading provider

It’s free to open an account, and you don’t have to fund or trade until you’re ready.

Choose IG as your extended hours trading provider

It’s free to open an account, and you don’t have to fund or trade until you’re ready.

Choose IG as your extended hours trading provider

It’s free to open an account, and you don’t have to fund or trade until you’re ready.

Choose IG as your extended hours trading provider

It’s free to open an account, and you don’t have to fund or trade until you’re ready.

1 A premium is incurred if a guaranteed stop is triggered
2 Awarded best trading platform at the ADVFN International Financial Awards and Professional Trader Awards 2019.