Brexit odds at bookies vs polls vs trade

[Xela]

my guess is if outcome is 52% for brexit, they'll still stay with limited political damage

Absolutely no possibility of this at all, Jack.

The Conservatives only have their very slender majority at all because they campaigned on a specific promise to hold a referendum and be bound by its result. If they don't leave the EU (even on a 50.001% vote to do so) there would be pandemonium and a general election: not only is every other party in the House opposing them, but about 75-100 of their own backbench MP's as well: they wouldn't last a week without a "no confidence motion", which triggers a general election.

So the referendum may not technically be binding in law, but it certainly is in practice, as it would take only a day or two to make it binding in law by removing the government, if they decided not to honour the result. Absolutely nobody here imagines otherwise. It's every bit as binding as if it were in an Act of Parliament, and everyone - on both sides - knows and openly acknowledges that.

At the moment, the consensus of "informed opinion" (which can, of course, be wrong) is that a 52% vote to stay is looking much more likely than a 52% vote to leave. It's going to be close, though. Probably closer than the Scottish independence referendum of last year.

 

[marcoPolo21]

one bookie says, only 20-25% chance they leave...

marc

 

[JackRab]

Nice and tight mkt here, eh ?

What do you want to do? 65/75... Anyway, it's going to be an interesting night

 

[Martinghoul]

What do you want to do? 65/75... Anyway, it's going to be an interesting night

Nothing to do... Your mid is a bit low, given where Betfair is at the moment, but it's OK.

 

[endicottsteel]

i find it bizarre betfair are showing 75% probability of remain when the poll of polls are putting it neck and neck. Its def mispriced imo.

 

[Xela]

i find it bizarre betfair are showing 75% probability of remain when the poll of polls are putting it neck and neck. Its def mispriced imo.

I agree it's strange ... but perhaps not really "mispriced" because it isn't actually "priced", per se, at all: the prices on a betting exchange are determined purely by the weight of money going on, so it's the bettors who have determined that price, not Betfair themselves. The collective opinion of bettors is just significantly out of line with the polls (as sometimes happens - and when it does, Betfair's usually closer than the polls).

 

[Martinghoul]

Again, the Betfair "Remain" mkt is a binary, which is very different to the polls... Other differences apply, as previously noted.

 

[newwurldmn]

Nothing to do... Your mid is a bit low, given where Betfair is at the moment, but it's OK.

Trade or tighten!

 

[zentrader]

Financial markets seem to be pricing brexit based on the betting markets, which are relatively small in $ size. If I were a large hedge fund, I would flood betfair with 'remain' bets to reduce the implied odds. When the financial markets reprice to reflect this, I can put on massive brexit positions at a favourable price. Nice skewed reward:risk

 

[Martinghoul]

Trade or tighten!

My mkt would be a lot tighter, obv, given where Betfair is...

Financial markets seem to be pricing brexit based on the betting markets, which are relatively small in $ size. If I were a large hedge fund, I would flood betfair with 'remain' bets to reduce the implied odds. When the financial markets reprice to reflect this, I can put on massive brexit positions at a favourable price. Nice skewed reward:risk

Sounds wonderfully easy in theory... In practice, not so much.