Prediction markets misprice Lula win after trading at 20% on 26 Oct 2026

Polymarket and Kalshi traded in favour of Flávio Bolsonaro at around 80% on the morning of Sunday 26 October 2026, but by close Luiz Inácio Lula da Silva won the runoff, media reported. Brazil’s Superior Electoral Court counted 51.8% of valid votes for Lula versus 48.2% for Jair Bolsonaro, according to CNBC; the Associated Press reported Lula’s final margin was almost 4.4 million votes. Bolsonaro refused to concede and said he would seek to annul the result, citing a last‑minute judge decision that kept polling stations open two extra hours.

Market behaviour

On Kalshi, Bolsonaro “traded above 80% for two days,” Michael McDonough wrote on X; afterwards Lula rose from 20% to 70% and Bolsonaro fell to 31%, during the largest volume in that market’s history. The Polymarket Brazil election market moved more than $249 million in total volume and resolved for Lula. Prediction markets are banned in Brazil.

“Lula went from 20% to 70% and Bolsonaro collapsed to 31%, in the biggest volume of the market’s life,” Michael McDonough on X.

Visible counts diverged from prices: runoff tallies gave Bolsonaro about 51% in a Rio Times count, much closer than market prices. The same Rio Times analysis found Polymarket’s order book thin enough that roughly $30,000 of sells would have cut five points off Bolsonaro’s price at 5:15 p.m. ET, and that prices moved 30 to 40 minutes ahead of the visible count.

Reactions and market effects

Analysts and Twitter users debated whether the result is one of the largest historical failures of prediction markets or simply statistical variance. Joe Weisenthal noted the scale of the error; Harry Crane and Nic Carter commented on the oddity relative to prior probabilities. Brazilian equities also fell: the U.S.-listed ETF EWZ dropped nearly 20% overnight, according to CNBC.

Lula will begin his new term on 5 January 2027, according to the Associated Press, while Bolsonaro’s challenge continues.