California Governor 2026: Two Trades Worth Taking
· By flowframe Staff
Eric Swalwell suspended and Steyer shot to 66¢ on Kalshi. That move is too aggressive. Here are the two trades worth taking: Steyer NO at 34¢ and Porter YES at 11¢.
Eric Swalwell was the favorite to win the California governor's race. Then his scandal broke on April 10 and he suspended two days later. Within 72 hours, almost his entire market share moved to Tom Steyer, putting Steyer at 66¢ on Kalshi. I think that move is too aggressive.
California's governor race works differently than most. The state runs a "top-two" primary on June 2 where every candidate is on the same ballot regardless of party. The two highest vote-getters advance to November. Since no Republican has won a California statewide race since 2006 and Trump's approval sits at 30% statewide, any Democrat who makes the top two almost certainly wins in November. The whole market comes down to one question: which Democrat advances from the primary?
There is no post-Swalwell polling yet. The most recent survey is a March Emerson (likely voters, March 7-9) and a SurveyUSA poll taken April 8-10 as the scandal was breaking.
The market's logic: Swalwell exits, Steyer is the richest Democrat left, Steyer inherits the probability. That's not wrong, it's just overpriced.
A SurveyUSA poll (April 8-10, 1,200 adults) has Steyer at 21% — a genuine 10-point jump from the 11% he showed in the March Emerson. His $89 million in ad spending is finally converting to progress and getting voters' attention.
But 66¢ prices him as a 72% favorite to advance from the primary. At 21% in a crowded field with 23%+ undecided and Hilton right behind him at 18%, that's not justified. Plenty of candidates polling in the low 20s in multi-candidate primaries don't advance. And California has a consistent pattern of rejecting self-funded billionaire candidates at the ballot box — Meg Whitman spent $144 million in 2010 and lost by 13 points, Steyer spent $253 million in the 2020 presidential race and dropped out without winning a single state.
Steyer is at 21% in the most recent poll. For him to be worth 66¢, he'd need to be nearly certain to finish in the top two on June 2. But in a race where Hilton is right behind him at 18%, two other Democrats are still competitive, and nearly a quarter of voters are still undecided, a lot can change before the primary.
There's also a pattern worth knowing: California voters have a history of not rewarding candidates who try to buy their way to victory. Meg Whitman spent $144 million running for governor in 2010 and lost by 13 points. Steyer himself ran for president in 2020, spent $253 million, and dropped out without winning a single state. Money helps, but it hasn't been enough on its own in California, and it wasn't enough for Steyer last time he tried.
True win probability: 36-50%. At 66¢, there's still meaningful edge even accounting for the SurveyUSA data.
Size conservatively, and look to exit if post-exit polling shows him above 28%.
Porter is the most logical beneficiary of Swalwell's exit. They drew from a similar voter pool — older, white, Bay Area liberals. His labor endorsements from CTA and SEIU are now free game, and a veteran labor strategist told the SF Standard Porter would be next in line for union backing. She also has eight years of congressional grassroots infrastructure that Steyer's money will not be able to buy or replicate.
The SurveyUSA poll puts her in third, behind both Steyer and Hilton, which weakens the "Porter inherits everything" narrative. Her favorability is not looking great at the moment.
True win probability: 14-23%. At 11¢, the market is at the bottom of that range.
The entire thesis depends on one catalyst: if CTA or SEIU endorse Porter individually before ballots come in May, this reprices to 20-30¢ quickly. If they split or back Steyer instead, the trade probably falls.
April 17 — Mahan's $35M fundraising deadline. A miss compresses his price further. Late April — Labor endorsement decisions. The biggest catalyst in this market. Early May — Mail-in ballots drop. Consolidation that hasn't happened by then is too late. Late May — First clean post-exit polls. This is when Steyer NO either strengthens or we need to look to exit. June 2 — Primary day.
Steyer NO at 34¢ is the primary trade. He's a real frontrunner now, but 66¢ prices him as nearly certain to advance from a volatile multi-candidate primary with a massive undecided pool. Porter YES at 11¢ is a smaller, speculative position that pays off if she gets some important endorsements soon.
Sources: Emerson College (March 7-9), SurveyUSA/ABC 10News (April 8-10), UC Berkeley IGS, Evitarus. Christian Grose (USC), Steven Maviglio (SF Standard). Market prices from Kalshi.