The Commons seat spreads – where the serious punters go

Reproduced above are this morning’s commons seats spreads from Sporting Index where you bet on how many seats the main parties are going to get at the next election. They show the Conservatives at almost their highest ever since the general election. There has only been one previous period, in late November, when the mid-point (the average of the BUY and SELL levels) has risen about the 300 mark.

As we get closer to the general election it will be spread markets like these where the serious action takes place. For here the more punters get it right the more they win – and the more they are wrong the more they lose.

What will give this a boost at the next election is that Sporting Index and others have made it considerably easier to open a credit account instantly online. This means that unlike other forms of betting you don’t have to put any money up front – a great boon for those of us who recoil at being asked to lock up cash now on an election that might still be two and a half years off.

Another reason why the spreads are attractive to gamblers like me is that if you correctly predict how you think the market will move then you can close down your position and pocket your profits immediately. Thus in July 2004 I put a £100 a seat spread bet on the Liberal Democrats when the buy level was 58 seats. By November 2004 the spread had risen sharply and I was able to close the position down at 72 seats. I made a profit of the difference between the two prices – 14 seats – multiplied by my stake level = £1400.

Even though the eventual outcome on May 5th 2005 had the party getting 62 seats that did not affect my winnings. Alas, it can of course go the other way and losses are calculated in exactly the same way as profits.

So what do we make of the spread levels above – are the Tories going to beat the 304 buy level?; will Labour do better than 272 seats and is there any value in the Lib Dem spread?

Before previous elections the spreads moved broadly in line with what the seat predictors suggested might happen from the latest polls. That’s not happening at the moment. There seems to be much more caution amongst Tory backers than we have experienced before. Thus last weekend’s YouGov figure fed into the main seat predictors suggest a total of 345-349 seats which would give Cameron an overall majority of 40-50.

The SI levels today suggest that Cameron would be 20-25 seats short of an overall majority.

WARNING: It’s very easy, especially when you have a credit account, to get carried away with this form of betting – so be ultra cautious and work out what your losses would be in the worst case scenario. Four hours before the polls closed on election day in 2005 I blew a significant part of my overall general election profits by putting several hundred pounds a seat on the Lib Dems at the 68 level. They got 62 seats. It’s still painful.

Mike Smithson