31January2010
Posted by QuikSand under: Prediction Markets.
While this site has mostly focused on markets that are beatable based on better information than the crowd… the pseudomarkets at WSEX have always been an intriguing exception to that principle. And while we tend to talk “long term” here, I’ll depart for a moment and discuss the absolute imposter of a long-term market — the short-term pseudomarket.
At WESX, during high profile sports events they frequently offer a “live betting” market, set up like their usual “long term market” but designed to resolve by the end of the immediate game. In football, these tend to be fast-paced when the meaningful outcome (often the result of the game *against the original point spread*) is in doubt.
A great case in point is the recent NFC Championship game. The WSEX spread was New Orleans -3.5, and the game at one point was clearly going to overtime. In my view, the in-game markets took some time to properly recognize the likelihood of NO covering that point spread (i.e. that even in most situations when they would win, they would do so with a field goal). For much of the overtime period, the BUY price for the Saints to cover the 3.5 points swung from a low of about 12 to a high of nearly 30. This is a situation calling for more “gut” than deep analysis… but one of our principles here is that while it’s tough to beat a deep, well-informed market of independent thinkers… it’s not necessarily so tough to beat a pseudomarket that is simply created on both sides artificially by someone’s judgment.
Whether WSEX uses some sort of down-and-distance formula (seems likely) or relies on “a guy at a computer” their play-by-play price adjustments are bound to trigger some opportunities.
With another high profile football game next weekend, there’s likely another money-making opportunity about to present itself.
17January2010
Posted by QuikSand under: Prediction Markets.
Some recent discussion at 538 hovers along the race itself, accuracy of polling, and the prediction markets as a stand-along element of that discussion.
As of ths writing, Intrade has the race fairly close to a tossup (odd for Massachusetts, of course) but more importantly for those in pursuit of worthwhile money, a fairly deep market for that site. If you like a Democrat win at a price of about 48, you can find around 100 shares (and many more around 50). If you expect a Republican win, there’s similar depth at price points of about 56, 57.5, and 58.5.
Since one of our frustrations in Intrade markets hass been their relative lack of depth — we at least ought to tip the cap to a fairly close American special election, that seems to attract enough isolated attention to make the markets worth a plunge, if you see value.
30December2009
Posted by QuikSand under: Prediction Markets.
Since we’ve been hitting the NFC heavily here to date, I thought I’d offer another tool for some perspective.
The nice automated tools at Oddschecker give us the “best available” price for a variety of markets (principally European ones) but even if you lack the flexibility to actually bet in the many online venues they cover, they can still serve as a worthwhile sanity check.
Our picks from the WSEX markets have been Philadelphia, Green Bay, and Arizona. Price checking with Oddschecker gives us:
Team WSEX Buy (as +odds) Oddschecker best price
New Orleans 45 (+122) 6/4 (+150)
Minnesota 21 (+376) 11/2 (+450)
Philadelphia 17 (+488) 7/2 (+250)
Dallas 13 (+669) 6/1 (+600)
Green Bay 10 (+900) 12/1 (+1200)
Arizona 10 (+900) 17/2 (+850)
So — if we use the multiple Euro/world future markets as a starting point, we see that the strongest play in the WSEX pseudomarket is clearly Philadelphia, who is paying substantially better than the best out there. You’ve heard this already here, but that’s a worthwhile play.
As a subsidiary play, we’re close to having a “sure thing” available with New Orleans. A SELL at WSEX ft $40 can be offset by a buy elsewhere at (essentially) $40 right now. A few ticks the right direction in either market could turn that into a free “both ways” play. For the rare player who has the liquidity and flexibility to do so, that’s tough to beat.
29December2009
Posted by QuikSand under: Prediction Markets.
As we have been following the WSEX markets for the NFC championship, this weekend posed a genuine fork in the road for the top dog, the New Orleans Saints.
Sitting at a buy price of $47 coming into this weekend, the Saints could lock up home field advantage with a solid showing — and that’s essentially all they can accomplish during the regular season, for purposes of the playoffs-based market we are watching. However, the results from the Saints’ actual weekend are more mixed:
-they lost their game against the lowly Tampa Bay Buccaneers, looking rather unlike a top contender in doing so; but
-when Minnesota lost on Monday Night (in slightly less disappointing fashion to an oddly rejuvenated Chicago bears team playing at home), the Saints still “backed into” the NFC’s top seed
So — the mathematical possibility of New Orleans having to play a road game is now eliminated. That’s good for their share price. But to the extend you subscribe to belief in things like momentum across the season, what you have seen on the field the last two weeks doesn’t exactly inspire confidence to make the Saints a nearly odds-on proposition.
The WSEX pseudomarket has essentially split the difference, with this week the BUY price for the Saints landing at $45, down from $47 before this weekend. We renew our call here that there is potential value in the market here for the less-pricey candidate teams, like the Philadelphia Eagles (buy at $17), Green Bay Packers (buy at $9) and perhaps the Arizona Cardinals (buy at $10).
26December2009
Posted by QuikSand under: Prediction Markets.
Quickly following up on our recent post about the WSEX NFC markets, we had speculated that the first loss by New Orleans might lead to an overreaction in their pricing.
Short version — not really. Their share price dropped overnight from a buy of $48 to one of $45 following the loss, pretty much in keeping with what seems reasonable (as we have discussed here, this is the market for playoff success, not playoff seeding).
The next day, the Minnesota Vikings — the only other team who could possibly claim the #1 seed– also lost, and did so in a fashion perhaps even more damaging image-wise than did the Saints. After the Sunday games, the buy price for the Saintss bumped back to $47, where is has rested all week.
No major opportunity creeping up there…from the simple perspective of “likelihood of claiming the #1 seed” it was actually a pretty good week for the Saints, who just need to avoid losing ground to the Vikings.
Stay tuned… we’ll keep watching this one.
19December2009
Posted by QuikSand under: Prediction Markets.
We have previously discussed here the pseudomarket at WSEX for the NFC conference championship. New Orleans, with its unblemished record has driven its BUY price all the way to $48, as they seem on target for the conference’s #1 seed.
Tonight, it looks like they will fall from the ranks of the unbeaten. What happens to that $48 buy price? Let’s face it — the outcome of this game, barring any serious injuries, has very little do with whether this team will win the two playoff games it needs to secure the conference title. So, what happens to the share price?
Stay tuned, it should be updated as soon as tomorrow.
17December2009
Posted by QuikSand under: Prediction Markets.
Senator Christopher Dodd, a prominent figure in legislative oversight of the financial crises, and now also in the health care debate, has come under fire in his home state of Connecticut. His Senatorial race in the fall of 2010 is not looking like the usual situation for a well-established incumbent.
Polling information from RealClearPolitics puts Dodd currently behind his presumptive GOP challenger by double digits.
Intrade has seen this market get a little attention, and the market doesn’t much like Dodd’s chances, either. Shares of a Democratis win for the open CT seat are at an ASK price of about $45.
Anything interesting in this market? Probably not right now. But in time, it’s hard to imagine that a well-funded incumbent will really get crushed in this race — so the respective market prices probably overestimate the certainty of his loss. Once we get into 2010 campaign mode (alas, when are we not in campaign mode?) this market ought to tighten, and the $45 price likely elevates.
16December2009
Posted by QuikSand under: Prediction Markets.
The offerings at Intrade for the Golden Globe awards are fairly newly cast, and still represent a dreadful lack of value for a still-evolving market. But the early push seems to be on the George Clooney feature, Up In The Air. Shares of that film were selling at an ASK of about 55, with a need to price all the way up to 65 to get even 50 shares deep. Clearly well too high for a value play.
The market bears watching, and may offer some speculative opportunities. But right now, the total ASK price on the five nominees totals about $140. Steer clear.
10December2009
Posted by QuikSand under: Prediction Markets.
Time to call a spade a spade here.
The WSEX pseudomarkets generically rely on “good-enough” information to drive share prices, and then they inflate the collective prices (and the implied transaction differential between the BUY and SELL prices) to ensure a house edge to overcome any shortfalls in the information they are using to set the prices. It’s not a bad model, don’t get me wrong. It’s not a true market, where prices are set by a robust series of open exchanges among willing buyers and sellers, it’s you against the house, and if they do a good enough job setting prices, they retain a healthy edge.
This year’s Heisman race seems to be very intriguing — the first “serious” threat being posed by a true defensive player in years, the highest profile quarterbacks stumbling in their final games and otherwise losing their blooms, two running backs who are diverse both in accomplishments and geography — it all adds up to a great place to drop a buy/sell market.
And WSEX is walking away from it. Clearly.
It is presumably for the same reasons we are pointing out here. This is tough to call, the information is tough to come by, and there’s a real chance that they might just have it all wrong. The posted prices in the “paused” market are clearly unreasonable, but to the extent they have tried to reset the prices, what should they do? Based on publicly available information, you might conservatively set manually set prices of around 40 for each of McCoy and Ingram, and maybe 25 each for Gerhardt and Suh, and 10 for Tebow. Than you have a horribly stilted market where it costs $130 to cover the five options… unattractive for buyers. But drop all those down by a fourth, and you run a real risk of someone just crushing this market with a bit of insider information.
So, they take a pass, likely in the name of “technical difficulties” and deprive us the chance to play at all. Boo, hiss.
9December2009
Posted by albionmoonlight under: Prediction Markets.
As this season has progressed, the Saints and the Vikings have taken all of the oxygen from the “who will win the NFC” debate. Right now, the teams combine for a $73 buy price on the WSEX market. As we have noted before, there is probably some overvalue at the top of this pseudomarket. In fact, if you recall, the season opened with several teams seen as legitimate choices to win the NFC. And, with the possible exception of the Chicago Bears, it isn’t like unathletic body snatchers from Pluto came down and replaced the players on those teams. Instead, some teams with real talent have simply been over-looked by the public in favor of the teams of the moment–the Vikings and Saints.
So, is there value to be found among the still-good-but-overlooked? If you beleive the Football Outsiders guys, there is. Right now, they have the Eagles and Packers as the second and third best teams in football. Right now, you can buy the Eagles to win the NFC for $10 and the Packers for $7 at WSEX.
When you consider that the Vikings have had a very easy schedule thus far, and the Saints have played three games against bad/average teams that they could/should have lost (Dolphins, Rams, Redskins), $7 and $10 look like pretty good prices for teams that have the talent to go to the Super Bowl and (according to Football Outsiders) have been playing at a level equal to that talent.