Wednesday, 8 October 2008

Elections stock market!

In a wonderful example of synchronicity, I was pointed at the UBC Elections Stock Market today. This is an amazing little thing - when I was a kid I worked this market hard for three or four elections, back on that monochrome computer in the basement, and then on my 386 when I got my first computer. I never lost money; once I only barely broke even, and once I roughly doubled my initial investment, and the rest varied. They used to have a $100 investment cap unless some conditions were met, iirc.

The method is straightforward: a stock for a given party in the MP market will be worth, after the election, the %age of the seats that that party got. A stock in the majority market is worth $1 if that guess is correct (eg. if it's a minority, then all majority stocks are worth nothing except for the 'no majority' option). This means that you can always buy a block of all parties or of all possible majority outcomes.

Unfortunately, my best former strategy - buy loads of blocks of majority stocks, sell the ones that are very unlikely whenever they spike, then in the last day or two as that gambler's choice becomes more and more certainly false, buying them back at fractions of the price (and cashing whole blocks back in before the actual election, not that it matters either way once a set is held) - doesn't work very well when the majority options are reduced to liberal, cpc, and neither. C'mon, if people will give me 4% odds that the NDP will take a majority, let me take those people's money!

In any case, there isn't much time left, but if you've always fancied yourself a good political analyst and you'd like to give day-trading a shot, I used to have a *lot* of fun with this, and I highly recommend it.

No comments: