Brexit update: Time to cover on Leave

Following weeks of big stakes on betting markets without that much volatility, exciting things are definitely afoot. Polls clearly identify a shift in favour of LEAVE and, despite daily waves of resistance, it is moving closer by the minute to REMAIN, the longstanding favourite.

This is a very positive development for my various betting positions, the latest of which was announced on Twitter last week.

Adding to my initial 50 unit bet on Remain getting between 50 and 55% at 3.8, along with a recent combination bet supporting the 50%  – 52.5% range, this is my overall position, prior to today’s new bet on LEAVE.

Remain 55% or more: -103 units

Remain 52.5% – 55%: +87 units

Remain 50 – 52.5%: +312 units

Remain less than 50%: +1 unit

As that list shows, the bad result for me is over 55% for REMAIN but I am finding it increasingly hard to envisage that scenario, and see no sense in covering it – at least yet. Right now, LEAVE has all the momentum in both polls and narrative. REMAIN seem in disarray, with their message struggling to cut through. Therefore, as announced just now on Twitter, I’m backing LEAVE at 2.5.

I suspect there is an in-built bias towards REMAIN in the market, for at least two reasons. First, a hunch that traders are simply covering positions on wider financial markets, without necessarily believing in this side of the trade. The swings back after logical drifts have been so immediate, overwhelming and hard to justify on analytical grounds.

Second, in expectation of a late swing towards the status quo. People remember the last General Election, when the most seats markets correctly strengthened behind the governing Conservatives despite polls suggesting otherwise. Or the 2014 Scottish Independence Referendum, which went from a virtual dead-heat a week out, to 55-45 in favour of maintaining the status quo.

Scotland offers so many parallels, and it may well be that change voters are scared off at the last minute. A really bad day for the pound or stock markets could generate dramatic headlines and prove a gamechanger. Perhaps the realised threat of Brexit will better motivate REMAIN supporters to turn out.

However another Scottish parallel is very bad news for REMAIN – namely the inability to win over Labour voters. Part of this may be to do with arch-enemy Conservatives leading the debate – although Jeremy Corbyn, Ed Miliband and Gordon Brown have all tried to be heard. I prefer this explanation from Owen Jones – that those that feel they have the least economic stake in the status quo are minded to abandon it.

It may well be that the main market is now wrong and LEAVE should be at least level pegging in the betting. The polls, narrative and odds seem certain to move in that direction for the next few days. Therefore, this is the perfect time to cover what would be a fantastic result – narrow REMAIN win – whilst increasing the risk on a decisive REMAIN win.

So the next bet is a 50 unit bet on LEAVE at 2.5 – see the list below for the new overall position. I should add to readers who haven’t followed all the earlier bets that the original 50-55% band still offers great value at 3.2. Combined with LEAVE, this means we can back under 55% at around 1.4. Without a gamechanger, that looks increasingly like banker material.

Updated Brexit Profit/Loss (prior to Betfair’s commission, to be calculated at the end).

Remain 55% or more: – 153 units

Remain 52.5% – 55%: +37 units

Remain 50 – 52.5%: +262 units

Remain less than 50%: +76 units

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