Congress veto override at 10c before 2027 — buy the tail risk
L1 prices Congress overriding a Trump veto before 2027 at just 10c with an IY of 1,863 — a rich yield on what is arguably a non-trivial political tail. L2 prices the same event on an open-ended basis at 29c, creating a 19c time-premium gap for the pre-2027 version. With Democrats at 82c to retake the House (per highlights) and the Senate a coin-flip, the procedural conditions for an override are more plausible than 10c implies. The 1,863 IY sweetens the entry significantly.
Markets are pricing extreme complacency on executive action risk: Congress veto override sits at 10c (L1) while Insurrection Act invocation ranges 21-44c across venues (L5, L6) — a 23c cross-venue gap that is our most actionable policy arb. With NATO media availability active (M1 at 64c, +58 delta) and Trump's bilateral Turkey meetings in flux (M5 at 13c, -55 delta), the policy signal is noisy but skewed toward surprise. This is a contrarian theme against the consensus view that executive power remains constrained.
CatalystDemocrats retaking House in November 2026 midterms; high-profile veto on popular legislation
RiskRepublicans hold House; override requires 2/3 supermajority regardless of chamber control
WatchCongress votes to override a Trump veto before January 1 2027 · by 2026-12-31
sf ideas && sf book KXVETOOVERRIDE-29JAN20-27