Spread markets open on the 2009 race

Although it’s less than a week since the last one the first spread betting market on the next General Election has now been opened an early prices indicate that Labour will be returned with a majority of about 20.

The opening spreads from Spreadfair are LAB 325-335: CON 226-232: LD 54-60 . The best prices on the conventional markets are LAB 4/7: CON 7/4: LD 80/1.

From a pure financial perspective the spreads make much more sense than the conventional bookmakers with the election a possible five years away.

With the latter you hand over your money and the next time you will see it, if you are lucky, is the weekend after the next vote. With the spread markets you can go in and out selling and buying and take any profit in cash maybe years before the vote.

I got the returns on my best 2005 General Election spread bet last October. I bought the Lib Dems at 58 and 60 seats and sold all my position in October at the 72 level making a return of twelve and fourteen times my stake level. As it turned out this was the highest price Charles Kennedy’s party got to in the markets and my profit more than covered the loss incurred on Thursday with my injudicious Lib Dem buy at 68 seats four hours before the polls closed.

Looking at the current prices then it’s highly likely that all the parties will see increases on the opening levels between now and 2009. A by-election which the Tories, as is their want, do badly could see thr Lib Dem price soaring and when Labour finally do get a new leader you can envisage a honeymoon period in which the spreads should move up. The art is to buy and a sell high – not always easy.

The betting exchanges also offer the opportunity of making profits by backing and laying but you cannot actually take more than your initial stake money out of a market until it is settled.

Betfair, meanwhile, have opened a markets on South Staffordshire – the Tory seat where no election was possible last Thursday because one of the candidates died.

Mike Smithson