New Tradesports rankings

[jimrtex]

Beware of putting much stock in lightly traded markets.  Not many people are trading that right now so it usually leads to a large difference between the bid/ask and general inaccuracy.

How much money is actually invested in Tradesports on the presidential nominations?  With candidates raising 10s of $millions, wouldn't it be an effective strategy to invest $X,000 to demonstrate rising interest in your candidate?

[jimrtex]

How much money is actually invested in Tradesports on the presidential nominations?  With candidates raising 10s of $millions, wouldn't it be an effective strategy to invest $X,000 to demonstrate rising interest in your candidate?

I don't know about the second sentence, but the volume traded on the presidential nominations is thousands of times larger than that on the individual contracts to win the general election.

Volume might be deceptive though.  Total volume on Colin Powell for the Democrat nomination has been 9500, 10% of that of Hillary Clinton.  But his price has been in the 0.1 to 0.2 range.  Since a contract is for $10, that means $.01 to $.02 per share, for a total of $200.

Betting on Clinton last week might have been $1000.

BTW, Tradesports is splitting off their political and similar bets to something called Intrade.  Tradesports will be solely for sports.

[jimrtex]

A question about tradesports: How do you bet against a candidate? Are there futures contracats like on the stock market, or is there some other mechanism for betting that a contracts price will decline?

The part of Tradesports not related to sports is now called
Intrade

You are actually making a bet with another individual.  Tradesports/Intrade is not a bookmaker where you bet against the house, but more of a broker.

If Edwards is at 7.0, it means that the last trade, someone bet 7.0 that Edwards would win, and someone else bet 93.0 that Edwards would not win.  The winner of the bet will collect 100.0.  In this case the contract value is $10, so the above bet would be $0.70 vs. $9.30.

Let's say that you ask 7.0 for Edwards (you are seeking someone willing to bet 7.0 that Edwards will win), and later the value of Edwards declines.  You might be able to bid 5.0 on Edwards at a later date, and close out your position, giving you a net gain of 2.0 (you have bet a total of 98.0 with a guarantee of 100.0).

I'd think if you were wanting to make money this far out, you would be trying to anticipate price shifts, rather than predict the ultimate winner.

[jimrtex]

Though you would need to first buy Edwards, correct? So if I think that Edwards will drop from 8 to 4 in the next week, I would first have to buy Edwards contracts at the current price, and couldn't make any money, right? I'd have to wait until I think he's undervalued, buy, wait till he's overvalued, and then sell. But if you think someone will make a steady decline and end up not winning, (such as Clinton, who I'm really thinking about), is there a way to make money?

All contracts will eventually end up at 100 or 0.  If you bet against Clinton (she is currently 48.5 to win, or 51.5 to lose) you would collect the 100 at the time she is not nominated.

[jimrtex]

Current asking price for the IA and NH winners (yes, they add up to more than 100, as the ask and bid prices haven't converged yet):

They should add up to more than 100.  Otherwise you could buy some of each an be guaranteed to make money. 

Though they ordinarily would add to something around 105.  With a new contract, someone may be offering high ask prices on everyone, hoping that people simply want to get on the action.

[jimrtex]

Republicans
Giuliani 35.0 (way ahead of both his bid & offer for some reason)

There were a bunch of shares traded at the Thursday close over a range of 31.5 to 35.0, with most towards the lower end.

If you look at the number of shares bid and asked, there are large numbers of  Bid from 31.3 or lower, and large number of Ask at 34.3 or higher, with little in between.  If you want to buy 7 shares (that is only around $25), you would have to buy the 7th at 34.3.

So maybe you had someone come in with a little more monay and buy everything between 31.5 and going up to 35 (this would be a few $100).

And then it looks like some other folks saw the opportunity and started making offers a bit below 35 (down to 34.3), but no one is buying.

[jimrtex]

Why is Bloomberg still included in the GOP nominee market?

I doubt there is any way to cancel a contract.  There are actually more bids on Bllomberg than any other candidate, but it represents a small amount of money (2373 at 0.2) would cost $47.46 and return $23,730.

[jimrtex]

I don't even know why someone would want to sell a contract like that for 0.1.  You're literally risking $1,000 to make $1.

Contracts on Intrade are for $10.  You're betting $10.00 to win a penny.

[jimrtex]

And if he doesn't run, you've just made an annual return of 0.1%.  Congratulations.  Could have made 0.5% in even the sh**tiest of savings accounts with literally no risk whatsoever.

You don't have to put the money in up front.

[jimrtex]

They certainly put a freeze on my money when I short something.

Do you have a margin account?

[jimrtex]

So is this the first time Paul-odds to win the GOP nomination has passed Edwards-odds to win the Dem. nomination?  How long before Paul-odds to win the GOP nomination passes Gore-odds to win the Dem. nomination?

Maybe they are gold speculators trying to boost a Paul candidacy?

[jimrtex]

As I speculated some time ago, couldn't that just be people closing out their bets?  Do they then get their remaining $ back?  Is that how it works?  For example, I buy Rice when she's at 5.0.  Some time later, I give up on her winning the nomination, so I short her at 1.0.  Do I then get back the $, or do I actually have to put in additional $?  That is, I paid $0.50 in the first place.  Can I then close out my account later when it's at 1.0, and get back $0.10 (the other $0.40 just being a loss at that point), or do I actually have to wait all the way until August 2008?

If you have opposing positions, they cancel, and you are credited with your gain or loss.  There are also some margin accounts that track the price, so that as the price dropped from 5.0 to 1.0 you would have your account debited.

[jimrtex]

Also, how exactly is a brokered convention defined?

The contract defines it as no nominee after the first ballot.  There is also a warning about "unforseen circusmstances".   So what happens if one candidate is just short of a majority, and the others are far short.  There is little likelihood of all the trailers coalescing on a single candidate, or a dark horse emerging, so you let everyone make a speech, and vote, and then you get delegations changing votes during the roll call.  It could mean either no "brokered convention" of a cancelled wager.

On the other hand, if one candidate has a majority, there is little likelihood of a cancelled wager.