Prediction Markets = Collective Forecasting = Collective Intelligence That Predicts
How frequent are arbitrage opportunities such as the following?
In addition to title, the reverse is true of OBAMA/DEM.
Do traders really think there’s some probability of McCain being elected as an idependent and Obama being replaced as the Democrat nominee?
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I would have thought the bigger opportunity was arb’ing between Intrade and Betfair. Betfair currently has Obama trading at 55% (as do most UK bookmakers).
Nigel, very interesting. I should follow and open an account at Betfair…
I don’t see an arbitrage opportunity on Intrade. On the Dem side, you have to pay 2% (.5%+.5% entry +1% settlement) in commissions to capture the 1.8%. On the GOP side, you have to pay 2% to capture 0.5%.
Betfair doesn’t want you as a customer, Mike. They are rightly concerned about the risks of providing services to Americans. If you figure out how to defeat their defenses, post about it anonymously on this blog. The reason TradeSports/InTrade has so much of the American market is that everyone else is afraid to enter.
Chris Hibbert is right. BetFair will sense your American IP and send you packing.
Jason, true, I’m a fool, or at least lazy. I did have in the back of my mind that I really ought to figure in trading fees before posting. One could attempt to be a price taker in complementary markets, but that isn’t risk free. Oops. And the odd pricing has persisted.
Chris and Chris … sad.