Time to bet against an early election

Time to bet against an early election

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    Thank you Gord for such a great market

This is not something I’ve done before but I was challenged here last week about my betting and I thought I would reproduce part of my trading details on the “Gordon weeks” betting market. What you are doing here is “buying and selling” the number of weeks that Gord’s premiership will last before the general election.

As I reported here just a week ago I had taken a view that the Labour conference would see an increase in the party’s polling position which would lead to the money going on an early election. My big bet was a sale contract at £42 for 75 weeks.

The price has moved sharply and I managed to get out of my position over the past three days at 36 and 44 weeks pocketing a nice profit. As can be seen I’ve made nearly £1500 already on this market.

Now, following the positive media coverage of Cameron’s speech and the Tory conference I’m betting against an early election by “buying Gordon weeks”. If Brown does indeed go for November 1st the market will close at the 19 week level so I would lose 32.36 minus 19 multiplied by the stake of £22. So the maximum amount at risk is about £260.

But if Brown doesn’t go then I start making money in February 2008 and as each week goes by my winnings will increase by £22. The earliest, surely, if it’s not to be in November will be the first week in May next year which would see a profit of about £220. If it’s May 2009 then I make about £1370 and if Gord goes right up until May 2010 the profit will exceed £2500.

I don’t know what is going to happen but the risk return ratio looks good.

Mike Smithson

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