While the Brexit markets are enormous, they have been frustratingly static for months. That, I suspect is about to change, and that means we need to act fast in reversing our latest position. Therefore, as advised on Twitter, I’m cancelling my recent bet on LEAVE to get over 47.5%, taking a two unit loss.
#Brexit update: Cancelled previous bet on LEAVE over 47.5% with 2 unit loss, laying 38 units at 2.6. Another one-sided poll suggests trend.
— Political Gambler (@paulmotty) May 18, 2016
Re #Brexit update: I still expect LEAVE to outperform polls but the market is bound to move against it in short-term at least.
— Political Gambler (@paulmotty) May 18, 2016
Two of the last three polls have shown massive leads for REMAIN of 15% and 18%. That is a marked change from recent years, and probably suggests a trend. Perhaps the government’s transparent Project Fear is working, or perhaps the language and tactics of the LEAVE campaign are backfiring.
Perhaps REMAIN are simply winning the argument on merit, although I’m sceptical that much deep, meaningful discussion is taking place outside the motivated minority. There is little in any of the media coverage to inform the neutral voter.
I still take the view that LEAVE will out-perform the polls due to differential turnout, perhaps even more so if REMAIN is seen as a certain winner. I’m happy with my initial bet on 50-55% for Remain at 3.9.
However this market is largely driven by polls and that means it will almost certainly move against us , at least in the short-term. As always the key to making an overall profit is correctly predicting the trajectory of it, including taking a loss when prudent. This 2 unit loss is small price to pay for getting out of what looks like a poorly timed bet.
Updated Brexit Position
If Leave gets less than 45%, 52 units loss
If Leave gets between 45% and 49.99%, 138 units profit
If Leave wins, 52 units loss