As implied in yesterday’s piece, I could hardly be more confident about my long-running pro-Clinton positions. Trump is headed for a big defeat and the task is to measure the scale of it.
At this stage, I’m not altering the published portfolio. I’m heavily invested in a big Clinton victory and expect the market will move in our favour as we approach polling day. Then I may consider some cover bets but not yet.
Nevertheless I am still trading and want to explain some of the opportunities to hedge between markets that are increasingly available.
There are now numerous markets related to the margin – including four handicap lines on Betfair, two regarding Clinton’s electoral college votes total. Democrat states won is another, if not exactly mirroring the electoral college tally.
Liquidity on Betfair is increasing, if nothing to get excited about. Therefore, it is tricky for me to list all the bets I’m placing. For example it might simply a case of taking £40 on one market, then hedging via another market instantly. Not enough to recommend as the odds may not still be available.
So instead, I’ll just offer an example of the type of hedges that are available. The most obvious is to hedge between Clinton for Next President and one or two of the margin options.
The best right now is to back her at 1.21 to be Next President. Then lay the two upper bands – 330-359 and 360 plus – in the Clinton Electoral College Votes market. The current odds to lay are around 3.4 and 3.2, which combined equates to around 1.67.
If the stakes are calculated with a view to producing the same returns, the trade effectively amounts to taking around 4.4 on Clinton getting 270-329. A big price about a 60 vote margin, which includes numerous realistic permutations and outcomes.
Note, this is not a tip, just an example. If you want to ask anything or clarify this complex trading strategy, feel free to comment below or ask me on Twitter @paulmotty.
We are already heavily invested in the handicap markets. They’ve all moved in our favour, but still make no appeal to cash out, for two reasons. First. laying higher bands in the electoral college markets as explained above offers better value.
Second, Clinton might need fewer votes than first thought to win these handicaps, if Evan McMullin wins Utah. If that live prospect occurs, she’ll need six fewer votes than the marks listed below in my p/l.
I wrote the text below before checking the rules against the RCP map of ‘Solid Clinton’, which discounts District of Colombia. Therefore, it will require all ten, rather than nine, of the RCP toss-ups – as amended below.
Obviously, the bet is now less value and I may well seek to bail out of it in due course. However I do still think these extra states are going to come into play, keeping the bet a live runner. Indeed there have been promising polls from GA and TX in the last 24 hours.
Somebody shrewder than me has obviously realised in the last few minutes, because the odds have drifted out to 6.4 from 3.0! I must add, though, that 6.4 is still too big.
The other market that intrigues me is Democrat States Won, which I advised a bet on 30 plus last week at 3.0. It’s actually bigger now, despite polls and other markets moving further towards Clinton since.
This strikes me as good value, considering the rapidly shortening odds in numerous individual states. I’ve long mentioned Arizona, Georgia and Texas as potential Democrat upsets. Given the toxic nature of Trump, I’m not ruling out other surprises that may not appear on the polling radar – especially if McMullin becomes a factor in states beyond Utah.
To reach 30, she’ll need to win all ten toss-ups on the current RCP map – she’s favourite in nine with Indiana the sole exception. That toss-up list does not include GA or TX so, adding them, she needs ten of those 12. It’s not a certainty by any means, given that IA and OH remain realistic Trump targets, but I reckon likelier than the 32% implied by the odds.
Note also that if TX and GA are competitive, that brings the higher electoral college bands very much into play. This is why, in all cases, it pays right now to be backing the upper end of these Clinton margin markets.
OVERALL POSITION AFTER ELECTORAL COLLEGE BETS
Trump President -561 units
Clinton 270 – 293: +75 units
Clinton 294 – 306: +110 units
Clinton 307 – 318: +165 units
Clinton 319 – 329: +242 units
Clinton 330 – 359: +392 units
Clinton 360 or more: +242 units
**I also have 50 units @ 3.0 on 30 or more Democrat states won. It could fall into either 330-359 or 360 plus, depending on the states in question.