Trade on politics, just like the stock market!

Trade on politics, just like the stock market!

Political betting is about a lot more than simply predicting the eventual winner of an election. A wide range of markets are live on betting exchanges such as Betfair throughout the entire race, with odds fluctuating by the second in response to market sentiment.

Therefore money can be made simply by predicting the trajectory of an individual’s rating, rather than taking a definitive view on the eventual outcome. Just as one can buy and sell shares on the stock market, we ‘back’ or ‘lay’ a particular individual’s odds on Betfair.

Take the 2012 Republican nomination race. At this stage, Rick Santorum’s odds were [200.0], equivalent to a 0.5% rating, yet he went on to win the opening Iowa Caucus and finished second overall.

Had we backed (bought) Santorum four years ago at 0.5%, we could have cashed out when that rating improved for a substantial profit, up to a peak of around 20%.

This is precisely what will make the US Presidential Election the biggest political betting event ever. There will be many twists and turns, candidates rising and falling. Each spike offers a chance to make money. The longer, more convoluted and dramatic a race, the better for gambling purposes!

With well over a year of the race left to go, there are already three live markets on the Betfair Exchange with plenty of liquidity – Next President, Republican Nominee and Democrat Nominee. None are straightforward, requiring expertise and good judgement to predict.

It is even possible to hedge between different markets – for example back someone for the nomination, lay at much shorter for the Presidency, knowing they have to win the former to compete for the latter (excluding a potential independent candidate like Donald Trump).

Solving this puzzle is already my principal focus and, from November, I’ll be coming to the States to watch at close quarters, visiting as many states as possible including all the key primaries.

As we progress, I’ll update all my trades here, in order to clarify the strategy. So far, I’ve been dabbling with speculative trades at big odds on the Presidency.

My first bet was on Scott Walker at 26.0 (4%), but I soon lost confidence so took a small loss at 32.0 (3%). That isn’t a definitive judgement on Walker – he could come back – but at this stage there’s no confidence behind him.

Next I backed Ben Carson at 65.0 (1.5%) for the Presidency and his odds have since halved. For now I’m holding the position as he’s very competitive in Iowa.

The next bet was Carly Fiorina at 60.0 (1.5%) for the Presidency. Though they halved initially, her odds are now out to 100 (1%). I’m holding the position for now but will look to get out if the odds move in our favour.

Finally, I’ve backed Ted Cruz for the Republican Nomination at 30.0 and then again at 25 for twice the first stake. These odds are now 13 (8%) so I could take a profit now. However this is a long-term position on a candidate whom I believe can at least stay the distance, so I’m holding it for some while yet.

 

US Election Bets

Backed Scott Walker for Presidency 4u @ 26.0
Laid Scott Walker for Presidency 3u @ 32.0
Backed Ben Carson for Presidency 4u @ 65.0
Backed Carly Fiorina for Presidency 4u @ 60.0
Backed Ted Cruz for Republican Nomination 5u @ 30.0
Backed Ted Cruz for Republican Nomination 10u@ 25.0

One response to “Trade on politics, just like the stock market!”

Leave a Reply

Your email address will not be published.