How the primaries have changed the betting

The above charts show the dramatic betting price changes, expressed as implied probabilities, that we have seen in the Republican and Democratic nomination races in the past month as we have gone through the first phase of the primary and caucus process.

The big change overnight has been in the GOP contest where for the first time we are getting some real clarity. It’s hard to see how Mike Huckabee can now get back into it after his second place in South Carolina. Fred Thompson had been out of it since before Christmas.

But is the 71 year old senator from Arizona, John McCain really a worthy odds on favourite after being totally thumped by Mitt Romney in the neighbouring state of Nevada? This wasn’t him just falling short as with Obama and Hillary Clinton – it was a devastating defeat by 37% which wasn’t predicted by any of the polls

Punters in the UK markets are blinding themselves to the threat from Romney – the GOP establishment candidate and the man who can throw a huge amount of money at the race as it goes on to Florida and then “Super-Duper Tuesday” on February 5th.

McCain has not really come under sustained fire and his age has yet to develop into an issue. Watch the Romney campaign in the coming days and weeks.

In the Democratic contest there’s no doubt that Nevada was a set-back for Obama and we have really seen the power and force of the Clinton machine when it feels threatened. Obama now has to have a convincing win in South Carolina if the momentum is to be with him for Florida and February 5th. It is hard to argue with Hillary’s betting price.

I think that the final battle will be Clinton against Romney and this is where my money is.

On Spreadfair I closed down at a loss my Huckabee positions overnight and have drastically reduced my position on Obama – adding to my profits which I have already pocketed.

Mike Smithson