Insider trading suspicions after Trump’s Iran U-turn and $2 billion pre-announcement trades

Donald Trump, for the whole weekend, was threatening vengeance, issued a 48-hour ultimatum and threatened to bomb all the energy installations if Iran does not open the Strait of Hormuz. Then, around 7:05 am EST on March 23, he took a sudden U-turn, calling for a 5-day truce, suggesting there were productive negotiations with the Iranian administration, a claim denied by Iran several times. If this sudden change in the wind was not malicious enough, US Senator Chris Murphy on Monday drew attention with a social media post that at around 6:50 am EST, $1.5 billion in S&P 500 futures were bought, while according to FT calculations, $580 million in oil futures were sold. He added, “Who was it? Trump? A family member? A White House staffer?” It appeared the so-called “terror regime” in Iran was more credible and reliable than the US President.

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Was there insider trading?

Allegations of insider trading have surged since the US-Israel began a military campaign against Iran, and claims that people close to the Trump administration have made or placed bets have spread rapidly. White House has denied such reports, but the number and timing hints otherwise. According to a Bloomberg report, the average trading for a similar period in the previous five trading days was 700 contracts. According to Tim Skirrow, head of energy and derivatives at consulting firm Energy Aspects, for that specific day, it was six times larger than usual, specifically with thin liquidity in pre-market hours.

Data from FT and Bloomberg shows that roughly 6,200 future contracts were traded in a single minute. They do not clarify whether it was a single activity or a group of co-ordinated activity. Similar reports surfaced of one person betting $655,000 in 2 per cent Out of The Money options in 1Day to Expiration just 15 minutes ahead of the headline breaking. This is high-risk, high-reward trading with absolute speculation, only if there is insider knowledge. While oil future is annonymous trading, accounts linked to Polymarket have been flagged for suspicious activity. One user named "Magamyman" made $600,000 predicting the February timing of the US strike. One person made $1 million with numerous precise bets since 2024 on the Iran war; the person has a remarkable 93 per cent accuracy. Similar, smaller bets were made on Maduro’s Capture. With one segment of the internet pointing at Baron Trump as the culprit.

Nobel Prize winning Economist Paul Krugman wrote that the surge in trading was bizarre, as there was no new news item for the sudden surge in transaction volume. "The story would be baffling, except that there's an obvious explanation: Somebody close to Trump knew what he was about to do, and exploited that inside information to make huge, instant profits," he added.