Trade Ideas

C7 and C8 show a 51-52 cent contagion gap: the trigger contract has moved -27 to -29 delta while lagging contracts remain stranded at 11¢. This is the signal priority #2 edge — the lag IS the edge. If H200 compute prices are moving sharply on the trigger contract, the lower-strike lagging contracts should follow within days. Entry at 11¢ on C7/C8 with target of 30-40¢ implies a 3-4x return on the contagion catch-up trade.

Y2 and Y3 both price at 6¢ with 64,179% implied yield over just 9 days — the second-highest IY cluster in the dataset. While individually low probability (~6%), a basket approach across Y2, Y3, Y4, and Y6 (Google Gemini 3.5 release at 7¢, 61,306% IY) creates a diversified extreme-yield harvest. Any single YES resolution returns 15-16x on that leg. The basket of four at 6-7¢ each costs 25¢ total with maximum loss of 25¢ and expected value above cost if even one resolves YES.

M3, M4, and M5 each price at 83¢ with 100% implied yield and $2,230-$2,420 in 24h volume, resolving in 75 days. At 83¢ on a near-certain outcome (highlights peg Democrats at 84¢ for House control), the annualized carry is extraordinary. M1 and M7 offer the same trade at 85¢ with 81% IY and $4,141+ volume — deeper liquidity for larger size. This is a yield harvesting position, not a directional bet.

M6, M13, and M14 all price at 44¢ with a 355% implied yield over 131 days — the highest IY in the dataset after filtering short-dated noise. With energy cost pressures embedded in the stagflation thesis and summer demand driving grid stress, the current 44¢ pricing on PJM market stress days appears 15-20c below fair value. The -71 and +53 deltas on M6/M13 signal recent sharp two-way flow — exactly where mispricing lives.

L1 prices a veto override before 2027 at just 10¢ (2,501% IY over short horizon), while L2 — 'ever override' — sits at 28¢ with 106% IY. The 18c spread between L1 and L2 implies markets believe an override will happen eventually but not before 2027, yet the political calendar (lame-duck session, spending bills) creates a compressed window of opportunity. With Congress historically more assertive post-midterm, L1 at 10¢ is deeply asymmetric if Democrats retake the House per M1/M3.

L3 prices Taft-Hartley invocation at 27¢ (112% IY), while L5 prices Insurrection Act at 18¢ (1,266% IY) — a 9c spread between two tools that share similar political incentive structures. Given labor market tightness embedded in the stagflation thesis and Trump's historical willingness to deploy executive authority, 27¢ represents a significant underpricing. The 112% IY provides meaningful carry while waiting for the catalyst. L6 at 43¢ (55% IY) on a broader Insurrection Act framing suggests the market is inconsistent in its own pricing.

M19 and M20 both sit near 47-49¢ on privately owned housing units authorized, with large negative deltas (-56, -66) signaling recent bearish flow. However, the 253-day horizon and 150-163% IY indicate structural uncertainty rather than informed selling. With the Fed on hold (72% probability per highlights) and mortgage rates stabilizing, the consensus bearish housing read may be premature — creating a contrarian BUY at near-50¢ on a coin-flip market with asymmetric carry. 3c between M19 and M20 also represents a minor internal arb.