Leaving office: six ways out, and what each one leaves behind on paper
The largest family of political contracts asks the same question about very different systems: is this person still in the job on that date. The answer always comes from a document - and there are six of them.
At a glance
- The contract shape
- "X out as [office] by [date]" - one template across every political system
- The six exits
- Term expiry, election defeat, resignation, formal removal, incapacity, death
- The recurring trap
- An announced departure is not a departure until it takes effect
- The second trap
- Acting, interim and suspended holders - does the contract count them?
The six ways out
Every departure from office falls into one of six categories, and each produces a different artefact on a different timescale. Term expiry is scheduled and needs no event at all. Electoral defeat runs on an election calendar and a certification process. Resignation is a unilateral act with a stated effective date. Formal removal - impeachment and conviction, a no-confidence vote, a party mechanism - follows a written procedure with a threshold. Incapacity has its own procedure where one exists. And death is immediate and unambiguous.
The systems differ in which of these are even available. A fixed-term presidential system offers no ordinary route by which a legislature removes a head of state for losing its confidence; a parliamentary system offers exactly that, and it is the normal mechanism rather than a crisis one. That is why the same contract template applied to two countries is asking questions with entirely different base rates.
The United States illustrates how narrow the formal routes are. Two constitutional paths exist to end a presidency early: impeachment and conviction for misconduct, which is a political process with a supermajority threshold, and the incapacity procedure introduced by the Twenty-Fifth Amendment, which is a distinct mechanism with its own congressional window. The amendment also settles what happens next - the Vice President becomes President on death, resignation or removal, rather than serving as an acting officeholder. The only early departure in the modern era came by resignation under threat of impeachment, not by the impeachment itself.
Six exits, three timescales. Scheduled ones need no event, procedural ones need a threshold, and one needs nothing at all.
What these contracts are actually asking
They are asking about a status on a date, which is a narrower question than the political drama that surrounds them. The person either holds the office at the deadline or does not, and no amount of pressure, scandal, protest or speculation changes the answer unless one of the six mechanisms completes. That gap between visible turmoil and formal status is where most of the mispricing in this family lives.
The board carries the template across every kind of system at once. Heads of state in presidential and parliamentary systems, in one-party states and in authoritarian systems where no formal removal mechanism has ever been used; a defence secretary serving at the pleasure of a president; a party leader answerable to a membership; and the president of an international sporting federation with its own statutes. Those have almost nothing in common except the shape of the question.
Which means the base rate is the first thing to establish and it varies enormously. An office with a fixed term and a high removal threshold has a very low unconditional probability of an early exit in any given year. An office held at another person's discretion has a much higher one. Pricing both from a general impression of political instability is the error the template invites.
- The question is formal status on a date, not the level of turmoil.
- One template applied to systems with wildly different removal rules.
- The base rate is a property of the office, not of the news.
Pushes the price up
- A scheduled election or term expiry inside the windowMatters
The only route that requires no event at all. Check the calendar before anything else.
- Visible political pressureCounts in combination
Moves prices far more than it moves outcomes. Pressure is not a mechanism.
Cuts both ways
- The effective date of a resignationMoves the market alone
Announcing and leaving are separate events, and the gap has been months. It decides deadline contracts outright.
- Which removal mechanisms the office even hasMoves the market alone
A fixed term with a supermajority threshold and an office held at will are not comparable propositions.
- Whether interim and acting status countsMatters
Suspended, acting, caretaker — the contract has to say, and often does not.
The document each exit produces
Resignation produces a letter with an effective date, and the date is the point. A resignation announced in September to take effect in January leaves the person in office for four months, during which a contract with a December deadline resolves no. This is the single most common way these markets are misread, and the fix is free: find the effective date, not the announcement.
Formal removal produces a recorded vote against a written threshold. Impeachment and conviction, a no-confidence motion, a party ballot - each has a published procedure, a quorum and a majority requirement, and each produces a record. Where such a procedure exists, the contract is tractable: you can count the votes, and the historical record of similar attempts gives you a base rate.
Electoral defeat produces a certification, and the politics domain covers that at length in the electoral college entry: the network call is not the certificate, and the gap between them has been weeks. Term expiry produces nothing at all - it is simply a date in a constitution - which makes it the cleanest of the six and the one worth checking first.
The two hardest are incapacity and irregular removal. Incapacity procedures produce a formal declaration where they exist and nothing where they do not, and health information about a serving leader is among the least reliable public information anywhere. Irregular removal produces facts on the ground before it produces documents, which means for a period the honest answer to who holds the office is contested - the situation the Venezuela entry describes in detail.
- Resignation: a letter with an effective date that is not the announcement date.
- Removal: a recorded vote against a published threshold you can count.
- Term expiry: a date in a constitution, and the first thing to check.
1Political pressure
Coverage, protest, coalition strain — none of it a mechanism
2A mechanism is invoked
A motion tabled, a procedure started, a resignation drafted
3The threshold is met
A recorded vote, a party ballot, a constitutional majority
The first moment the outcome stops being a forecast
4Effective date
Frequently later than the decision — sometimes by months
Where a correct view still resolves a deadline contract the wrong way
5Vacancy or succession
Who holds the office next, and whether they hold it in an acting capacity
6Recognition
For contested exits, the point at which the answer stops being disputed
Behind the subscription
The rest of this entry is the part that changes a decision: what moves the price, which contract sets it, who ships it and where that can be cut off.
What moves these prices, and what should
The countable threshold arithmetic that settles most formal-removal contracts, why the calendar check comes first, and why an at-will office needs completely different pricing instincts.
Where the consequence is priced
Why a sovereign spread usually carries better information than a leadership contract, and how to read a ladder of deadlines on one person as an implied hazard rate.
What follows a vacancy
Why automatic succession bounds the consequence of a departure, why leadership and policy contracts are not substitutes, and what happens to an unsourced contract during a contested succession.
How to price one of these
The three-step routine: check the calendar, enumerate the mechanisms this office actually has, then read the deadline against the effective date rather than the announcement.
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Frequently asked questions
- What are the ways a leader can leave office?
- Six: term expiry, electoral defeat, resignation, formal removal such as impeachment and conviction or a no-confidence vote, an incapacity procedure where one exists, and death. Each produces a different document on a different timescale, and not every office has every route.
- Does announcing a resignation resolve an "out by" contract?
- No. The person is out when the resignation takes effect, and that date is frequently later than the announcement — sometimes by months. This is the most common way a correct political read still loses a deadline contract.
- How can a US president be removed early?
- Two constitutional routes: impeachment and conviction for misconduct, a political process with a supermajority threshold, and the incapacity procedure under the Twenty-Fifth Amendment. That amendment also makes the Vice President President outright on death, resignation or removal rather than an acting officeholder. The only modern early departure came by resignation under threat of impeachment.
- Why do these contracts move so much on news?
- Because pressure is vivid and mechanisms are dull. A scandal or a protest changes the coverage without necessarily changing the probability that a formal procedure completes before the deadline, and the gap between the two is where this family is repeatedly mispriced.
- How do I use several deadlines on the same person?
- Read them as one question at multiple horizons. The differences between adjacent deadlines give an implied hazard rate — how much probability the market puts on each additional interval — which carries far more information than any single contract in the ladder.
Primary sources
- Congressional Research Service — Presidential succession: perspectives and contemporary issues for Congress
- Congressional Research Service — The Twenty-Fifth Amendment and presidential inability, part 1
- Constitution Annotated — Overview of the Twenty-Fifth Amendment, presidential vacancy and disability
- National Constitution Center — 25th Amendment: presidential disability and succession
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