All
Outcomes
Market
Price
AI Fair
Value
Value
Edge
Flávio Bolsonaro
YesNo
Ratinho Júnior
YesNo
Luiz Inácio Lula da Silva
YesNo
Renan Santos
YesNo
Tarcisio de Freitas
YesNo
Jair Bolsonaro
YesNo
Fernando Haddad
YesNo
Michelle Bolsonaro
YesNo
Eduardo Bolsonaro
YesNo
AI Insights:
16 hours ago UpdatedFair Value Reasoning:
Although Lula (45.5c) and Flávio (38.4c) dominate the market, their combined pricing is only ~84%, leaving a ~16% premium for 'other candidates'. Given the March polling context (indicating a 'technical tie' and high polarization) and the fact that Tarcísio has dropped out to endorse Flávio, the probability of a third-party breakout is extremely low. Therefore, fair value should further consolidate around the top two, with Lula and Flávio combined approaching 95c. Current prices for Ratinho and Renan Santos (combined ~9c) are significantly overvalued and should trend toward zero.
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Arbitrage|Low Risk
Arbitrage Plan:
Buy Yes on Lula + Buy Yes on Flávio Bolsonaro
Plan Description:
This is a classic 'Low Risk Yield' (Soft Arb) opportunity. The sum of Yes prices for Lula and Flávio is currently only 83.9c (45.5 + 38.4). This means you can cover the two most likely election outcomes for just 83.9c. Given the polling data showing a 'dead heat' polarization, the probability of anyone else winning is extremely low (far below the market-implied 16%). Holding this bundle until the election or until the market rationalizes (pushing their combined price above 95c) offers an absolute return of ~19%, or ~35% annualized.Sign up to view more information
Arbitrage: 16¢
|Annualized yield: 34.8%
Hedging
VALE
EWZ
PBR
The Brazilian presidential election has a massive impact on the country's assets. The economic policy divergence between Left (Lula) and Right (e.g., Tarcisio or Bolsonaro family) candidates is stark, directly affecting the Brazil ETF (EWZ) and state-owned giants (like Petrobras, PBR). A Right-wing victory is generally seen as pro-market and favors privatization narratives, while a Left-wing re-election implies continued state intervention. Regarding FX, the result will significantly impact the BRL/USD exchange rate, slightly affecting the DXY.
Divergence
The main divergence lies in the pricing of a 'third force'. Mainstream polls (Datafolha/Quaest) consistently show the Brazilian election has consolidated into a binary contest between Lula and the Bolsonaro family (Flávio), with other candidates severely marginalized. However, the prediction market still assigns a combined probability of over 10% to candidates like Ratinho Júnior and Renan Santos. This significantly contradicts the political reality, suggesting market lag or irrational long-tail betting.
