Bolsonaro Leads Socialist Lula As “Huge Bet” On Right-Wing Victory Fuels Brazil ETF Options Frenzy

Summary:

• “Explosive Surge” in iShares MSCI Brazil ETF (EWZ) call open interest
• BTG Pactual/Nexus Survey Shows Bolsonaro Leads Over Socialist Lula 
• UBS Calls Brazil Election “Extremely Close” – Bolsonaro Win Would Cement LatAm’s Political Shift

The BTG Pactual/Nexus survey released earlier today puts right-wing Senator Flávio Bolsonaro narrowly ahead of socialist President Luiz Inácio Lula da Silva, though within the margin of error, as a deepening Supreme Court scandal strengthens the conservative challenger’s campaign.

🇧🇷‼️ | El Candidato Presidencial, Flávio Bolsonaro, lideró una masiva concentración de personas durante las celebraciones por el día de la independencia de Brasil. Bolsonaro afirmó que la voz del pueblo es la voluntad divina y aseguró que en las elecciones de octubre desplazará a… pic.twitter.com/UQkdjNQDyh

— UHN Plus (@UHN_Plus) September 7, 2026

At the center of the political turmoil is Justice Alexandre de Moraes, who oversaw the case that sent former President Jair Bolsonaro to prison for plotting a coup. Newly published private messages, according to Bloomberg, suggest closer ties between Moraes and Daniel Vorcaro, the former owner of failed lender Banco Master, which is under investigation for fraud.

“Anyone who votes for Lula is voting for Alexandre de Moraes,” Bolsonaro recently told supporters.

Polymarket odds for next month’s Brazilian election show the gap between Bolsonaro and Lula narrowing dramatically.

Overnight, we ​​​​​​showed an “explosive surge” in iShares MSCI Brazil ETF (EWZ) call open interest.

And someone appears to be making a huge bet on just that: explosive surge in EWZ call OI https://t.co/nqFaGgms4R pic.twitter.com/uen9bXmqBw

— zerohedge (@zerohedge) September 8, 2026

“The Brazil FOMO is real,” The Market Ear wrote on X. 

EWZ call open interest just hit record highs. The Brazil FOMO is real.https://t.co/23lNn352mk

— The Market Ear (@themarketear) September 7, 2026

A Bolsonaro victory would reinforce South America’s broader shift from unhinged left-wing regimes toward the common sense right.

UBS Calls Brazil Election “Extremely Close” – Bolsonaro Win Would Cement LatAm’s Political Shift 

Socialist Brazilian President Luiz Inácio Lula da Silva’s polling lead over right-wing Senator Flávio Bolsonaro has eroded in recent weeks, leaving both statistically tied in UBS’ latest runoff polling average. 

Arend Kapteyn, UBS’ global head of economics and strategy research, described the upcoming election in early October as “extremely close” in a note to clients on Monday.

Kapteyn’s note today puts Bolsonaro at 50.4% in a hypothetical runoff, against 49.6% for Lula, adding that the narrowing spread leaves the candidates statistically tied. 

Kapteyn continued:

On 4 October, Brazilians will vote for a president, the entire Chamber of Deputies and two-thirds of the Senate. Brazil currently has one of the highest real interest rates in the world, contributing to increasingly adverse debt dynamics. In our view, an election outcome that delivers a credible fiscal consolidation program could significantly improve the macroeconomic outlook. Relative to our baseline, real interest rates could fall by at least 2.5 percentage points (to around 5% from 7.5%), potential growth could be 1pp higher (2.5% rather than 1.5%), and inflation could be around 1pp lower (3.5% rather than 4.5%).

Our poll aggregator currently shows first-round voting intentions of 42.5% for Lula and 36.0% for Flávio Bolsonaro. Given the historical polling error of approximately 3 percentage points, the candidates’ confidence intervals overlap. Rejection rates are elevated for both candidates, while other contenders collectively attract 21.5% of voting intentions. If no candidate secures an outright majority in the first round, a runoff will be held on 25 October.

The second round appears even tighter. Lula currently polls at 49.6% of voting intentions versus 50.4% for Flávio. Compared with our poll update a week ago, the lead has effectively changed hands. Importantly, these surveys were conducted before the latest controversy involving a Supreme Court justice, who is alleged to have advised an individual under fraud investigation, a case that could potentially implicate key allies within Lula’s inner circle.

Historically, incumbent presidents have generally secured re-election when their “good or great” approval rating exceeded 40%. Lula currently stands at 37% on this measure. Conversations with two political consultants also suggest that momentum may be shifting in Flávio’s favor. Nevertheless, prediction markets continue to assign Lula a modest advantage. Polymarket implies odds of roughly 55%-43% in Lula’s ffavor while Kalshi places the race at approximately 55%-44%.

Polymarket Odds:

Read:

• Brazil’s Socialist President Sees Lead Disappear As Bolsonaro Heir Turns Presidential Election Into Coin Toss
• Brazil’s Socialist President Sees Lead Evaporating, New Poll Shows

The election may determine whether Brazil moves further left or right politically. Across the continent, the latest country to shift right was Colombia. Many others have followed:

By mid-2026, South America had already flipped. Argentina (Milei), Chile (Kast), Colombia (de la Espriella), Peru (Keiko Fujimori), Ecuador (Noboa), Bolivia (Paz), and Paraguay (Peña) sit on the right.

The remaining large left-wing governments are Brazil and Uruguay. Brazil accounts for about half of South America’s GDP and population. If Brazil goes right, the region would be entirely aligned with the Trump administration and would be on track to rid itself of nation-killing socialism and other failed progressive experiments.

In Germany on Sunday, right-wing Alternative für Deutschland delivered its strongest election result ever in Saxony-Anhalt, dealing a sharp blow to the political establishment. Nomura analysts indicate that Europe may be in the early stages of “lurching right” (read the report).

Putting this all together, Western voters are rejecting nation-killing left-wing regimes that have done nothing more than allow mass migration, pursue progressive experiments, and neuter the West’s industrial and power grids with climate change policies, which has only given China a leg up in the AI and weapons race.