SportingIndex
CON 352-357 LAB 208-213 LD 50-53

MORI moves the Labour spread by just one seat

The immediate reaction of the spread betting firms to the sensational MORI poll suggesting a hung parliament was to suspend trading while they took stock of the situation. We’ll have to wait until later in the day for the latest extrabet spreads but SportingIndex did produce revised figures yesterday afternoon and put Labour up by just one seat.

Before the poll came out Brown’s party had been on 202 – 207 207 – 212 seats. This has now moved to 203 – 208 208 – 213 seats where it has remained. So the main conclusion is that few punters were ready to change their positions or start risking money on Labour as a result of the poll.

Spread-betting on commons seats is a high risk high reward activity where you can win and lose a lot of money. I know one punter who bought Labour at £100 a seat at the 332 level just before Brown election U-turn in October 2007. If he’s still in the contract he’s facing a loss of his stake level multiplied by the difference – just under £13,000.

At the 2005 election the markets over-stated Labour and the Lib Dems while under-stating the Tories.

One of the great joys of spread-betting is that if you predict it right and the spread moves up or down by more than the difference between the buy and sell levels then you can close down your position pocketing a profit immediately.

Thus someone who bought Labour at its low point of 197 seats in early October could get out today and make eleven times his/her stake level without having to wait for the general election

My guess is that punters will want to see more evidence before pushing Labour up further. At the moment the mid-point Tory spread points to an overall Conservative majority of 55 seats.

Mike Smithson