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Tuesday, September 05, 2006

Trade Sports update on November 2006

--posted by Tony Garcia on 9/05/2006

It is time for the recurring review of what investors are saying for the November elections.

GOP holding control of the US Senate

The last time we checked in on TradeSports (about a month ago) the odds of the GOP holding the Senate were at about 83% and holding. That remains true...the odds are at 80% with very strong support. Translation: being about 2 months away the horizon is very good for the GOP and maintaining the majority in the Senate.

GOP holding control of the US House

The GOP was barely holding its head above the 45% chance line (above which the event is considered a coin flip's chance). The downward trend on their chances, however, has continued and is now at 40%. It is continuing the downward trend and (investors will understand this) there is substantial resistance currently preventing a run up above 45%. Translation: there is a growing chance, according to those putting their money up, that the GOP will lose the majority in the US House.

GOP candidate winning MN US Senate

Two months ago Kennedy's chances were hanging by a thread to stay above 45%. Last month the chances fell to 20% and this month the bottom continues to fall out...according to the investors. The hard part is there are people reporting polls showing a narrowing of the gap between Kennedy and Klobuchar. I believe polls are worth less (regardless of what they are showing) than looking at the money so, if I were forced to listen to one or the other (polls or TradeSports) then I choose TradeSports. The good news for the Kennedy camp is there is little support or resistance which means the chances could change suddenly and quickly for little reason.

GOP candidate winning MN Governor

Consistency in the odds. That is the report here. Since late January Pawlenty has been above 55% (the upper range where the odds are a coin-flip chance). He has been above 80% chance of victory solidly since 1 August. The silver lining for Kennedy is the same rain cloud for Pawlenty: there is little support or resistance which means the chances could change suddenly and quickly for little reason. That said I think, barring some major something-or-other, Pawlenty should begin booking places for his re-election inaugural balls.

I hope to check in on these a little more frequently.

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Blogger Both Sides of the River said...

This is an interesting way of looking at elections. What factors do you think people use to determine their bets? I almost want to sink some money into Dems just so I have some consolation if Republicans lose...almost.

September 07, 2006  
Blogger Tony Garcia said...

The market makers (yes, there are market makers at TradeSports) I am certain only work on contracts they know. As for investors I am guessing the same holds true.

Take you for example, with these 4 contracts. How strongly do you think the chances are of Kennedy winning? If you think it is a strong possibility then you simply invest $2.00 per contract (plus fee) and if you are right each contract will cash out at $10.00 (minus fee).

The sight is based on the concepts of Wall Street. Invest where you want, but most invest in what they know.

September 07, 2006  

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