US presidential election 2020

Joe Biden is the president-elect, having beaten Donald Trump in a hard-fought contest. Learn how you can trade in the aftermath of the US presidential election with our huge range of markets.

Call +41 (0) 58 810 77 42 to talk about opening a trading account. We’re here from Monday to Friday from 9am to 6pm.

Contact us: +41 (0) 58 810 77 42

Call +41 (0) 58 810 77 42 to talk about opening a trading account. We’re here from Monday to Friday from 9am to 6pm.

Contact us: +41 (0) 58 810 77 42

Tips for trading result of the US election

Markets are often volatile following a US election – and this year could be more unpredictable than most. 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 to reduce your chances of being caught out by quickly developing stories. Our award-winning trading platform has a range of in-built tools to help you,4 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,2 and you’ll get extended hours on key US shares – exclusive to our clients. Plus, with our free trading app, you’ll be able to take a position 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, SMS or push notification – and you can take a new position or alter an existing one in seconds.
  4. Trade on positive or negative price 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 can still be surprises. Cap your maximum risk by placing guaranteed stops on your positions.3

Why trade the US election with us?

Deal GBP/USD from just 0.9 points

Go long or short on a range of currency pairs including all major USD, GBP and EUR crosses

Free risk management

Protect your capital with guaranteed stops that only incur a fee when triggered.1

Choose from a range of price alerts

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

Trade exclusive weekend markets

Speculate with 24-hour trading on leading US indices2 and extended hours on key US shares

How could Joe Biden’s win affect market sentiment?

Market analysis from IG Senior Market Analyst Joshua Mahony.

Despite a raft of lawsuits from Donald Trump to fight back against the election result, it is evident that Joe Biden has taken the White House by a significant margin after a drawn-out week of ballot counting. The consistent gains we have seen since election day highlight a feeling of optimism, in that the result will stand and trade relations between the US and other countries will normalise.

Between improved global trade, expectations on a major stimulus package, and hopes of a coronavirus vaccine, we have seen a Biden bounce for global equities. Unfortunately for the dollar, the risk-on sentiment we are seeing represents a negative for USD and other havens such as the yen.

However, that does not necessarily stand for gold, with the precious metal performing best when stocks are moving gradually higher – rather than during major declines or spikes in markets. As such, while gold could underperform during a period of major market appreciation, it looks likely to gain ground over time once we start to see this market surge turn into a more gradual trend once more.

One of the biggest winners from this comes in the form of the Chinese yuan, with the prospect of a more normalised relationship with the US helping reverse the weakness seen throughout the Trump presidency.

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 GBP/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.

Could Trump’s refusal to concede affect the markets?

Trump’s failure to concede quickly could cause increased volatility in the markets in the coming days or even weeks. Markets hate uncertainty, and the outgoing president’s failure to recognise that he has lost is certainly unprecedented.

In response to the result, Trump has filed several lawsuits in numerous states, hoping to overturn the result on claims of a fraudulent election. But, with speculation mounting over the salience of Trump’s legal battles – and with the so-called Biden bounce already in effect – it remains to be seen just sincere a chance he has of clinging onto power.

Steps to trading the US election

  1. Trade CFDs with IG Bank
    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.

  2. Select a market
    You can trade the election by speculating on markets such as indices, shares and forex pairs. The US 500, GBP/USD and US stocks all tend to continue to move following the result.
  3. Open an IG Bank trading account
    You can open an account with us in 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.

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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

Deal 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 was the US election?

The US election was held on Tuesday 3 November 2020, when all 50 states and Washington DC cast their votes. The result was delayed, with neither candidate able to clinch the all-important 270 Electoral College votes until Saturday 7 November – when the Associated Press declared Pennsylvania for Biden, pushing him over 270 and handing him the presidency.

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.

To find out about significant movement as it happens, you can set alerts in an IG Bank demo or live account.

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

We enable you to 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 to offer 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.

Markets to watch

The markets to watch going forward are USD, US stocks and indices and commodities including gold and oil. But, it’s important to remember that the coronavirus pandemic is likely to create significant volatility following the election period as Biden’s plan comes into action.

Learn more about the impact of coronavirus on the markets

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

Forex

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

Stocks and indices

US stocks and indices including the US 500 and Wall Street are expected to experience major price moves as the office of the presidency changes hands.

Commodities

The prices of commodities including gold and oil 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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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 Bank as your out-of-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 Bank as your out-of-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 Bank as your out-of-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 Bank as your out-of-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 Bank as your out-of-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 Bank as your out-of-hours trading provider

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

1 Awarded best trading platform at the ADVFN International Financial Awards and Professional Trader Awards 2019.
2 Trading is available around the clock, apart from 11pm Friday to 5am Saturday and 20 minutes just before markets open on Sunday.
3 A premium is incurred if a guaranteed stop is triggered.
4 Tax laws are subject to change and depend on individual circumstances. Tax law may differ in a jurisdiction other than Switzerland.