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An options-pricing approach to forecasting the French presidential election

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  • John Fry
  • Thomas Hastings
  • Jane Binner

Abstract

A subjective probability argument suggests vote-share estimates from polling companies can be interpreted as market prices. The corresponding election constitutes the price at a known future date. This makes an options-pricing approach particularly attractive. In this setting, vote-share estimates, the probability of winning the popular vote and the second-round qualification probability all have a convenient representation in terms of binary options prices. In this article, we develop options-pricing, vote-transfer, and Monte Carlo methods to forecast the French presidential election. The approach fits well with the proportional and regimented two-stage nature of the French election but applies more broadly. Unusually for a French system characterised by uncertainty and constant flux the incumbent President Macron appears in a dominant position throughout the 2017 and 2022 elections albeit with no chance of an outright win in the first round.

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  • John Fry & Thomas Hastings & Jane Binner, 2025. "An options-pricing approach to forecasting the French presidential election," Journal of the Operational Research Society, Taylor & Francis Journals, vol. 76(1), pages 167-179, January.
    • Handle: RePEc:taf:tjorxx:v:76:y:2025:i:1:p:167-179
    DOI: 10.1080/01605682.2024.2334339
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