Thursday, November 02, 2006

2006 Election Markets

Where's the money on the election? markets - where people put their money on the line current spreads

GOP to retain control of Senate: 70.0/71.0 (50-50 would count as control due to VP)
GOP to retain control of House: 30.0/32.0

There are 32k and 87k contracts traded respectively. (pretty high)

I am a little surprised that the GOP Senate contract is this high - GOP would have to take two out of three out of Virginia, Missouri and Tennessee.

Then there are some interesting parlays on control which are new and have very little volume so far:

GOP House/GOP Senate: 26.0 / 31.0
Dem House/GOP Senate: 39.0 / 42.0
GOP House/Dem Senate: 1.0/4.0
Dem House/Dem Senate: 29.0/32.0

GOP House & Senate is probably a good sell above 30.0. GOP House and Dem Senate is a buy here because it is sooo cheap. Unlikely, yes. But look at this very good article by Jim Geraghty on the seven houses races where the Democratic incumbent could be in trouble. By my math, the Dems need a total of 218 seats for control and have 201. So that's 17 (there's an independent so if caucuses with Dems will mean 16 required). So far virtually every one has ignored vulnerable Democrats - every one they lose increases their magic number - maybe they get 18 but lose three of these seven? Anyway, a cheap bet.

No comments: