Patri\'s Election Results

DEM SWEEP Tradesports contract
Cheering crowd

I'm sure you're all on the edge of your seats waiting for the election results you rooted for, so here they are:

Patri's Net Profit +$2,100
Capital Used $22,000
Avg. Time Period 3 Weeks
Annualized Return Rate +165%

I should admit that this positive result is not really an indication that my general policy of selling longshots, based partly on this analysis, is correct. After all, this strategy should expect a lot of small wins and an occasional large loss. But it is still satisfying to see the election exactly where I expected (but not hoped) - a narrow Bush victory. While the profit was fairly small relative to the capital invested, ie I did much worse than someone who just bet Bush, I also had a lot less risk. And the profit was just fine on a percentage return basis, as you can see.

It was interesting that there were good bets to be had right up until the election. That is great because part of the problem with my strategy (selling overpriced longshots) is that, with Tradesports strict margin requirements, I have to lock up a lot of capital not earning interest. If there's a contract (like DEM.SWEEP) that I think should be priced at 0.5, and I sell it at 4.0, I have to deposit $96 for every $3.50 I'm going to make. If the good bet was only available a few months before the election, that would be a much less attractive rate of return. But if I can make $3.50 from $96 in 3 weeks...that's a pretty good deal!

There were even more good bets to be made if I'd had more money free, perhaps next time, although things may not be as good next election. On the one hand, you have this event people are impassioned about, hence likely to make poor decisions. On the other hand, futures markets are just going to get bigger, and that means more clever traders. We'll see. I expect to withdraw most of my money now, leaving a little to continue my pre-election month-by-month betting that bin Laden will not be captured, or anything else that looks good. Since Tradesports mostly has sports and financial contracts, which I don't trade, I've seen few profitable non-election positions. But they are actively adding interesting new contracts, so you never know.

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I put 50 into the IEM. My

I put 50 into the IEM. My final position tuesay morning was 50 shares of bush over kerry, but under 52% of the total between the two of them, and 95 in greater than 52%. So I come out precisely where I started.

I feel for those who invested heavily in Kerry. Those who trie to game the market especially. They are sadder, but I doubt they are any wiser.

I also have a great deal of sachenfrued over Soros's 15 million bet on defeating Bush. We got a lot of Move on and ACT literature that he was paying for. :wall: He would have been better promoting a free trader oppositon to Bush. It would have probably been a more successful tactic as protection, while a winner in the contribution stakes is usually a loser at the ballot box. But fundimentally Soros, Move on and ACT were depending on the electorate being stupid, and they were wrong.