Mystery traders may have made tens of millions of dollars in mere minutes after betting on markets just before a surprise social media post by Donald Trump raising hopes of peace with Iran.
The bets on oil prices and stock markets were made 15 minutes before the US President said there had been ‘productive’ talks – sparking furious allegations of insider trading.
Traders stood to make fortunes from the bets placed on Monday morning amid sharp criticism from politicians on both sides of the Atlantic of ‘repugnant’ behaviour and ‘mind-blowing corruption’.
Oil prices had been soaring and stock markets plunging as the Middle East conflict threatened to escalate.
But when Mr Trump declared on his Truth Social platform that there had been talks ‘regarding a complete and total resolution of our hostilities’, those moves went into reverse.
A quarter of an hour earlier, there had been a sudden spike in oil trading volumes to around $600million (£450million) over just a couple of minutes.
At the same time, $1.5billion (£1.1billion) was bet on America’s S&P 500 stock index.
It is not known which way the bets were made – and how long it was before the traders cashed out.
Markets reversed course after Mr Trump’s announcement
But $600million bet on a falling oil price may have made $60million after oil prices fell 10 per cent.
And $1.5billion staked on the S&P 500 could have yielded $30million after the index rose by 2 per cent.
A few hours after Mr Trump’s announcement, Iran’s parliamentary speaker, Mohammad Bagher Ghalibaf, said ‘no negotiations’ were under way and that the US President was seeking ‘to manipulate the financial and oil markets’.
The trading activity follows previous fears of insider trading around Mr Trump’s military action in Venezuela and tariff policies.
Chris Murphy, a US Democratic Senator, said: ‘Who was it? Trump? A family member? A White House staffer? This is corruption. Mind-blowing corruption.’
John Glen, a Tory MP and ex-Treasury minister, now a member of the Treasury select committee, told the Daily Mail: ‘Drawing quick and easy conclusions about market movements is a very difficult judgment to make but it does look highly unusual to see these sorts of trades given the timing of them.’
He called on global regulators to investigate, adding: ‘It is pretty repugnant to think that people made money out of war.’
Stephen Innes, an analyst at SPI Asset Management, said: ‘What stands out here isn’t just the size of the trades but the timing.
At 7:05am Donald Trump posted on Truth Social about US-Iran talks and halting planned strikes. S&P 500 futures rose more than 2.5 per cent following the announcement. Oil dropped 6 per cent
‘Traders are not clairvoyant. When positioning shifts minutes ahead of a market-moving headline, it usually means someone is acting on… intel before the story broke.’
Michael Brown, senior research strategist at broker Pepperstone, said: ‘It really isn’t a good look and these volumes do look abnormal compared to what we would typically expect to see at that time of day.
‘There have been concerns over prediction markets and insider trading for a while now and this is only going to amplify worries that participants already had.
‘The main reason that capital markets work and are so efficient and trusted is due to a belief that everyone is on a level playing field, with access to the same level of public information.
‘If we were to get to a situation where that were no longer the case, then confidence in the smooth and efficient operation of markets at large could begin to be shaken significantly.’
Another markets expert said: ‘Hard to prove but my hunch is administration insiders are tipping the wink to some people – I don’t see what else it can be.’
A White House spokesman told the Financial Times it does not tolerate officials illegally profiteering from insider knowledge, adding that ‘any implication of such activity without evidence is baseless and irresponsible reporting’.
