When the referendum campaign began, I recommended one bet, on a narrow preference for the status quo, with REMAIN getting between 50.01 and 55% of the vote share. Specifically, by a margin of 52-48. On the eve of our most significant vote in living memory, I’m standing by that prediction and making no changes to our portfolio.
For readers new to the market, I believe the best two bets right now are the same 50.01-55% band for remain at 2.66, and LEAVE at 4.7. Combined after commission, the two bets pay just over 1.6 on REMAIN getting less than 55%.
In order to reach 55% and the bet lose, REMAIN would need a considerable late swing. Without overinvesting in the polls, there is hardly any evidence of anything like a 10% margin of victory. Granted, tonight’s Comres survey shows an 8% lead but today’s other three polls showed a 2% lead and deficits in two big sample online polls, albeit including a large number still undecided.
I do actually believe there will be a late swing to the status quo, particularly among the undecideds. It seems almost a constant in elections, particularly referenda. It blindsided the polls in both the 2014 Scottish Independence Referendum and last year’s General Election. Betting market trends prior to both – a short odds favourite getting shorter in spite of a polling narrative proclaiming ‘too close to call’ – are eerily reminscent.
However as argued previously, I also believe differential turnout will provide a counterweight for LEAVE, whose supporters are more motivated and invested in the issue. Interestingly on Channel 4 News, Michael Crick reported that LEAVE believe they are comfortably ahead on postal votes, constituting up to a quarter of the entire turnout.
Prior to the Comres poll, it felt like LEAVE were actually ahead. They’ve led more polls than trailed over the past three weeks – ranging between 42% and 55%. Tomorrow we will know whether Comres was an outlier, or the first signal of that late swing.
However the key point for me is that anti-EU sentiment in Britain is not a fickle, fleeting phenomenon. Most made up their mind a long time ago. Having waited their entire political lives to this cause, one would expect their activists to be better organised. 45% – the target of that combined bet – seems an unambitious target.
Recommended bets (only for readers not already following my Brexit portfolio)
Back Remain to get 50-55% 40 units @ 2.66
Back LEAVE 22 units @ 4.7
***Portfolio advice update***
Of course if you’ve been following the portfolio, this does not apply as we already have a similar position. If REMAIN were to get 55%, I would take a heavy 153 unit hit. Anything less yields a profit, with 50 – 52.5% by far the best result, yielding 262 units profit.
Looking at the current markets, I see no merit in covering. As the results come in, if our dream band is a live contender, I may consider adding a saver if it becomes clear which way to cover. If so, I’ll announce on Twitter although obviously at that late, live stage it will be impossible to guarantee any prices lasting!
Remain 55% or more: -153 units
Remain 52.5% – 55%: +37 units
Remain 50 – 52.5%: +262 units
Remain less than 50%: +76 units