Insurrection Act 20c cross-market gap — buy cheap, sell expensive
L5 prices Insurrection Act invocation at 22c while L6 prices the same event at 42c — a 20c cross-market spread on economically equivalent outcomes. This exceeds the 5c cross-venue arb threshold by 4x. The 812 IY on L5 vs 55 IY on L6 confirms L5 is the high-yield long leg and L6 is the short. With Trump's approval weak and legislative gridlock confirmed by L1/L2 pricing, structural volatility in executive action markets is elevated.
With Trump tariff probability at 83c and markets pricing significant policy disruption, downstream legislative checks are dramatically underpriced. L1 prices a Congressional veto override before 2027 at 10c with a 2,061 IY — the market is assigning near-zero probability to any institutional pushback despite documented political stress. Meanwhile, Insurrection Act invocation (L5 at 22c, L6 at 42c) shows a 20c cross-market gap between two versions of the same event — a structural arb within the policy space.
CatalystAny domestic civil unrest event or Trump executive order escalation
RiskGap persists due to different contract specifications (tenor or trigger conditions)
WatchL5 reprices toward L6 (42c) or L6 fades toward L5 (22c) as consensus forms · by 2026-12-31
sf ideas && sf book KXINSURRECTION-29-27