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Author Topic: Today's "Election Futures" market changes
James
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posted 14 June 2004 07:05 PM      Profile for James        Edit/Delete Post
Bid Offer Change

Liberals 33.4 34.4 +0.70

Conservatives 33.4 34.4 -0.10

NDP 16.9 17.4 +0.30

Bloc Québécois 10.2 10.7 +0.20

Green Party 4.5 5.0 -0.10

That is a HUGE one day change, especially in the Liberal numbers, which suggests to me that somone with access to some inside polling results is trying to cash in.

From: Windsor; ON | Registered: Mar 2004  |  IP: Logged
matty
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posted 14 June 2004 07:08 PM      Profile for matty     Send New Private Message      Edit/Delete Post
That is a HUGE one day change, especially in the Liberal numbers, which suggests to me that somone with access to some inside polling results is trying to cash in.[/QB][/QUOTE]

um, perhaps i'm just unaquainted with stock shorthand - could you interpret this a bit more.


From: Toronto, ON | Registered: Jun 2004  |  IP: Logged
robbie_dee
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posted 14 June 2004 07:12 PM      Profile for robbie_dee     Send New Private Message      Edit/Delete Post
Also, where are these figures coming from? The election stock market model I am most familiar with, http://esm.ubc.ca , is not running for this federal election.
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BugBear
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posted 14 June 2004 07:15 PM      Profile for BugBear   Author's Homepage     Send New Private Message      Edit/Delete Post
What was that link again?
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James
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posted 14 June 2004 07:23 PM      Profile for James        Edit/Delete Post
Well basically the "market" for Liberal "popular vote futures went up by .7 % today; the N.D.P. by .3 %

These people are backing their predictions with hard cold cash, and every dollar invested in "liberal shares" first thing this morning would now be worth $7.

For it to go up that much in one day means some person or persons have spent a lot of money to "buy Liberal" and "buy NDP" today.

They don't spend money like that without hard information.

The fact that they don't seem to be "short selling Conservative stocks" would also suggest that whatever polls they are relying on show that "undecideds" are breaking Lib and NDP exclusively


From: Windsor; ON | Registered: Mar 2004  |  IP: Logged
James
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posted 14 June 2004 07:25 PM      Profile for James        Edit/Delete Post
Here's the link;

http://www.shorcanindex.com/election.html


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Rufus Polson
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posted 14 June 2004 08:23 PM      Profile for Rufus Polson     Send New Private Message      Edit/Delete Post
My goodness! The magic of the market! Well, if a pseudo-market says it, it must be true!
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Privateer
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posted 14 June 2004 09:21 PM      Profile for Privateer     Send New Private Message      Edit/Delete Post
This market has proven very accurate in past elections.
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matty
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posted 14 June 2004 09:26 PM      Profile for matty     Send New Private Message      Edit/Delete Post
quote:
Originally posted by JamesR:
Well basically the "market" for Liberal "popular vote futures went up by .7 % today; the N.D.P. by .3 %...For it to go up that much in one day means some person or persons have spent a lot of money to "buy Liberal" and "buy NDP" today.

Perhaps there's an anticipated up-swing (not that the Liberals could seemingly sink further) from the recent billions in bribes - er subsidies being announced by the Liberals for auto plants and other sustainable industries [much sarcasm].


From: Toronto, ON | Registered: Jun 2004  |  IP: Logged
James
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posted 14 June 2004 10:11 PM      Profile for James        Edit/Delete Post
quote:
Originally posted by Rufus Polson:
My goodness! The magic of the market! Well, if a pseudo-market says it, it must be true!

It is not a "pseudo" market. They are dealing in real dollars, and you can bet that their picks are backed by the best research (and insider information) available.


From: Windsor; ON | Registered: Mar 2004  |  IP: Logged
James
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posted 15 June 2004 12:20 PM      Profile for James        Edit/Delete Post
Changes today through 11:04 A.M.

LIBS -0.6
CONS -0.2
NDP +0.3
BLOC +0.3
GRN +0.1

So, the Liberals have given back almost all their gains of yesterday, the Conservative slide of yesterday has accelerated, the NDP trend continues up, as does the Bloc. That's how the speculators saw the debate.

[ 15 June 2004: Message edited by: JamesR ]


From: Windsor; ON | Registered: Mar 2004  |  IP: Logged
Stephen Gordon
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posted 15 June 2004 12:43 PM      Profile for Stephen Gordon        Edit/Delete Post
Any idea about how many people are participating?

I'm sceptical about just how 'efficient' these markets are. I participated in one of the UBC markets and made a fairly decent return. It turned out that I was was possibly the only one who could figure out what the no-pure-arbitrage condition was, and how to make a certain profit when they weren't satisfied. Most days, I made money just by arbitraging. In the 'real world', this doesn't happen.


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James
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posted 15 June 2004 02:46 PM      Profile for James        Edit/Delete Post
quote:
Originally posted by Oliver Cromwell:
[QB]Any idea about how many people are participating?

I gave them a call - there are about 250 traders participating at this point; and very healthy volume.

btw - daily change to 1:37 E.D.T. :

LIBS-0.6; CONS -0.6; NDP +0.3; BLOC +0.4; GRN +0.1

QB]


[ 15 June 2004: Message edited by: JamesR ]


From: Windsor; ON | Registered: Mar 2004  |  IP: Logged
Sports Guy
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posted 15 June 2004 04:20 PM      Profile for Sports Guy     Send New Private Message      Edit/Delete Post
OC, how did you arbitrage given that there is no spot market?
From: where the streets have no name | Registered: Mar 2003  |  IP: Logged
Stephen Gordon
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posted 15 June 2004 04:36 PM      Profile for Stephen Gordon        Edit/Delete Post
I don't know how this one works, but the UBC model provided 2 ways of getting a share: buying it on the market, or buying a bundle of all shares for the fixed price of $1. Similarly, there are 2 ways to sell a stock.

Since there are 2 ways of buying/selling a stock, there's a possibility for arbitrage if the prices are sufficiently wonky.

I suppose I could just tell you what the condition is that allows pure arbitrage, and how to exploit it, but you'd have to pay a hefty consultant's fee.


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paxamillion
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posted 15 June 2004 04:42 PM      Profile for paxamillion   Author's Homepage     Send New Private Message      Edit/Delete Post
quote:
Originally posted by Sports Guy:
OC, how did you arbitrage given that there is no spot market?

My finance is rusty, but doesn't there need to be two markets for arbitrage?


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Stephen Gordon
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posted 15 June 2004 04:50 PM      Profile for Stephen Gordon        Edit/Delete Post
Not quite - what you need is the possibility of having 2 prices for the same good. A second market will do that, but given the structure of the election markets, there is another way of buying something at one price and selling it at a higher price.
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paxamillion
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posted 15 June 2004 04:52 PM      Profile for paxamillion   Author's Homepage     Send New Private Message      Edit/Delete Post
Thanks, OC!
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Sports Guy
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posted 17 June 2004 01:08 AM      Profile for Sports Guy     Send New Private Message      Edit/Delete Post
I think that you are right OC, there should also be an arbitrage opportunity here somewhere, the bid-ask spreads appear to be constant at 1 for the Libs and Cons and .5 for the Bloc, NDP and greens, rather than acting as a funtion of each securities liquidity. My guess is that the short side would be more ineffecient, however, I am too burned out from the CFA exam to try to figure it out.
From: where the streets have no name | Registered: Mar 2003  |  IP: Logged
Stephen Gordon
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posted 17 June 2004 11:45 AM      Profile for Stephen Gordon        Edit/Delete Post
A quirk of election stock markets is that the price of a 'market portfolio' is always equal to one: if you have 1 of each party, your payoff has to equal $1.

There are 2 ways of buying and selling a market portfolio:
1) buy or sell a bundle for $1
2) buy the components one at a time on the market

The no-pure-arbitrage condition is

sum of bid prices < 1 < sum of ask prices

If the sum of the bid prices is greater than 1, you can create a market portfolio for $1, sell off the pieces and make a profit. If the sum of the ask prices is less than one, you can buy the pieces to get an asset whose value is equal to $1.


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Sports Guy
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posted 17 June 2004 12:08 PM      Profile for Sports Guy     Send New Private Message      Edit/Delete Post
That is what I thought and I have been checking, however, it appears in this market that the sum of the prices are constant, that they determine the price by taking the net position of each future (long-short) as a percentage of total market with a small adjustment up/down to create the bid ask spreads.
From: where the streets have no name | Registered: Mar 2003  |  IP: Logged
Stephen Gordon
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posted 17 June 2004 12:11 PM      Profile for Stephen Gordon        Edit/Delete Post
Aren't the bid and ask prices set by market participants?
From: . | Registered: Oct 2003  |  IP: Logged
James
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Babbler # 5341

posted 21 June 2004 11:56 AM      Profile for James        Edit/Delete Post
Today by 10:55


Bid
Offer
Change

Liberals
31.8
32.8
-1.60

Conservatives
31.3
32.3
-2.10

NDP
17.7
18.2
+1.50

Bloc Québécois
11.6
12.1
+0.40

Green Party
5.0
5.5
+1.00

This is the the first that I've seen any party move by more than 0.7 either way in a whole day, let alone 2 hours. something significant would seem to be happening.


From: Windsor; ON | Registered: Mar 2004  |  IP: Logged
Albireo
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posted 21 June 2004 01:36 PM      Profile for Albireo     Send New Private Message      Edit/Delete Post
But what knowledge would these traders have that the rest of us political schlubs wouldn't? Internal polls? Yet-to-be-released large public polls? I wonder if this market is as rife with "insider trading" as any other...
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Stockholm
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posted 21 June 2004 01:39 PM      Profile for Stockholm     Send New Private Message      Edit/Delete Post
I suspect that this works in synch. with the real stock market. When people spot "bargains" they buy. Maybe a lot of people thought that the NDP was undervalued on Friday and saw a buying opportunity based on EKOS and SES numbers.
From: Toronto | Registered: Sep 2002  |  IP: Logged
James
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posted 21 June 2004 02:26 PM      Profile for James        Edit/Delete Post
quote:
Originally posted by albireo:
But what knowledge would these traders have that the rest of us political schlubs wouldn't? Internal polls? Yet-to-be-released large public polls? I wonder if this market is as rife with "insider trading" as any other...

I certainly suspect that it is. That is what makes it so interesting. If you were making minimum wage working nights and weekends crunching numbers at S.E.S. or some outfit doing interals for one of the parties, wouldn't you be tempted to suppliment your income ?


From: Windsor; ON | Registered: Mar 2004  |  IP: Logged

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