Al Root

Greenland, the thinly populated island and territory of NATO member Denmark, has become the unexpected apple of President Trump's eye.

That spells volatility for markets, which translates into potential gains for investors. Whatever happens, investors should remember that there is potential for heartache, too, when using stocks to bet on the outcome of an event.

To be sure, issues surrounding sovereignty and national defense are serious. Still, markets can be cold, calculating machines that move as investors try to position themselves for any outcome.

Not all the moves make any sense, though. Coming into Wednesday trading, shares of tiny Greenland Technologies Holding were up 31% over the past week despite having nothing to do with Greenland. It's a New Jersey-based seller of drivetrain equipment for industrial machinery and has a market value of just $17.9 million.

Shares of Groenlandsbanken, or the Bank of Greenland, were up almost 50% over the past week. At least that company does business in Greenland. Still, why the stock would be up that much on geopolitical concerns is a mystery. Strictly speaking, the move means investors see earnings growth accelerating as a result of America's desire for international expansion.

Whether that's the right call or not is hard to say. If investors really want to have a Greenland trade, however, they might want to consider Polymarket.

The current odds that the U.S. invades Greenland in 2026, acquires Greenland in 2026, or acquires Greenland in 2027 are 10%, 23%, and 18%, respectively.

If an investor "buys" those odds, they essentially acquire those bets at 10 cents, 23 cents, and 18 cents a share, respectively. If any of the outcomes happen, those 'shares' become worth $1.

If the events don't happen, however, they lose everything. It's a little like a stock options trade. With a call option, an investor pays a relatively small amount to buy a stock in the future for a fixed price.

Today, investors can pay roughly $2 to buy Nvidia stock for $23o by the end of March. If Nvidia stock is, say, $250 at the end of March, when the option expires, the investor would turn that $2 bet into $20, making $18. If Nvidia stock, however, is $229 at the end of March, up from a recent $182, the options holder loses all of the $2.

That math is simple, and options trades are often more complicated than that. Point being, options trades are riskier and more volatile than owning stock. That's likely the case for the betting markets too. But at least Polymarket trades offer a way to directly bet on what might happen.

Other tangential ways to play the issue are with European defense stocks or critical minerals companies.

Europeans won't likely be thrilled with the U.S. if it takes Greenland. That would prompt European governments to continue to diversify away from U.S. security hegemony.

Geopolitical realities already have that trade working. Coming into Wednesday trading, shares of Germany's Rheinmetall, Britain's BAE Systems, Italy's Leonardo, and France's Thales were up an average of 117% over the past 12 months. Those gains aren't likely to slow down if tensions over Greenland heat up.

The U.S. in Greenland would surely stoke hopes for more mining activity on the island, too. Shares of rare-earth MP Materials could rise on hopes that it will have more business to conduct more quickly.

MP is the largest miner of rare earth materials in the Western Hemisphere and signed a blockbuster deal with the Defense Department in 2025 that include captial, price floors, and offtake agreements.

The MP idea feels a little more tangential than even EU defense stocks. It feels less tangential than Greenland Technologies.

Tangential bets are always risky, though. Many things move stocks beyond any one issue the market chooses to focus on for a time.

Write to Al Root at allen.root@dowjones.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

January 14, 2026 11:06 ET (16:06 GMT)

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