The first article I ever wrote for this site was about recency bias: The habit of people to focus on the last bit of information they got on a topic and overstate its importance. As with many biases, it crops up again and again and the Johnson survival market right now is a classic example.

So far this month the odds on a 2022 departure for the Prime Minister have fallen after the local elections, shot up in advance of the Sue Grey report, and now fallen right back once that was published (despite 9 more Tory MPs publicly calling for him to go since then*).

Every twist in the story sends the market into a frenzy. Any bad news causes punters to act like a leadership challenge is imminent, while any good news (or even not as bad as expected news) leads to endless articles about how the danger to Johnson has passed.

It’s an absurd and unhelpful way of trying to forecast what will happen. Johnson’s survival is driven by underlying and often unknowable factors regarding the personal feelings and group dynamics of the 358 other Tory MPs eligible to call a no confidence vote.

MPs certainly care about public opinion, but fundamentally there are not a couple of dozen MPs changing their minds on Johnson’s leadership every time a banner headline about him is published. The jittery odds are a deeply inefficient market.

Ironically, given the contents of my first PB article, we are forgetting the experience of the May government right now. Rumours of leadership coups can swirl constantly for months or even years, and no-one but Graham Brady knows how close we are to a no confidence vote being triggered. Public declarations are the only real information we have to bet on, and even they aren’t entirely reliable.

So speaking of betting, how do you trade a market which keeps overreacting? Simple: You look for the most likely thing it will overreact to next.

It isn’t hard to guess what the next major event in Johnson’s leadership is likely to be: In under a month we have simultaneous by-elections in a Labour-facing marginal and a Lib Dem-facing safe seat, and the Tories are big underdogs in both (going by the polls). A double defeat (or probably even a single defeat) will doubtless cause more focus on the loyalty of Tory MPs. After all, nothing focuses the mind like the risk of losing your job.

Will the Tories ditch Johnson if they lose both by-elections? Maybe, but I don’t really know. But fundamentally betting is about beating the market, and I feel fairly confident in how the market will look a day or two after such an event. You can get around 5/2* right now on the exchanges, and there should be a good window for profit-taking in a matter of weeks.

I’m on the record for a long time that ousting a PM is very difficult, and Johnson is more likely to fight the next election than people think. But for now I’m taking a position on a short departure and hoping to make a quick buck. In a few weeks I might look like I was trying to be too clever by half, but time will tell.

*(At time of writing)

Pip Moss posts on Political Betting as Quincel. He has bets at 3/1 on Boris Johnson leaving office in 2022 and bets at 2/1 that the Tories hold Tiverton and Honiton (which he’s not feeling so good about). You can follow him on Twitter at @PipsFunFacts