Wednesday, November 7, 2012

Final arbitrage position statement

InTrade will not allow me to deposit more than $5000 in a 30-day window, so I can't arbitrage any longer. My current positions:
  • 739 shares on Obama at InTrade bought at USD$6.74 per share on average. 
    • If Obama wins, I net USD$2389 less credit card exchange rate losses two ways.
    • If Romney wins, I lose USD $5001 and credit card exchange rate losses one way.
  • AUD$1000 on Romney at BetFair at 4.4.
    • If Obama wins, I lose USD$1053 and credit card exchange rate losses one way.
    • If Romney wins, I net USD$3335 less credit card exchange rate losses two ways.
  • 2959 shares on Romney (mix long Romney short Obama) at iPredict, average price NZD$0.2297.
    • If Obama wins, I lose USD$563
    • If Romney wins, I gain USD$1849
On net, then, if Obama wins, I'm up $773. If Romney wins, I'm up $183. Less credit card exchange rate fees and realised currency risk in both cases. I expect Obama to win, so I don't mind having an unbalanced position. I'm currently cheering only for that the election be decisive and not go into endless recounts or Supreme Court challenges that push the payout until after my credit card comes due. If you're a voter in a swing state, I strongly encourage you to go with whatever everybody else seems to be doing.

I'd like to resist the temptation to play at range trading on iPredict during the day so I can get a clean final outcome, but I doubt I'll be able to.

Previously: Barriers to Arbitrage (why most folks may not be doing this); Documenting the Arbitrage.

In other news, it's fun to compare these two Twitter searches [ht @LyndonHood]:
In both states of the world, it's optimal to move to New Zealand. Tiebout gives you the only vote where you're guaranteed to win.

2 comments:

  1. now read up here economist, you do not bet on both sides. You had good access to markets and you divided your bets . Do you want to shift to Australia and be famous or not or not . Brisbane is where you should take your talent . Do not hedge your bets, leave Christchurch now.The polls and international read were clear. There was never any chance that Romney would win,

    ReplyDelete
  2. Brisbane has spiders. Really really big spiders.

    ReplyDelete

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