The Off Topic Topic

[Tamas]

Yi, in 2008 I put some money in Intrade, mostly betting against Ron Paul becoming the nominee.

You probably need to avoid the illiquid markets--or basically everything sans the presidential ones. You also should know the funding isn't so easy--I think I sent a wire transfer, but they needed to actually mail me a check when I cashed out.

I don't know I have a lot of confidence the site is going to stay around. I wouldn't let money sit there.

too bad, because it is a neat idea.

But I would need to wire money to it, as they have this extra internet security shit for cards which my card doesn't have, and I am not sure which hungarian banks carry it yet.

[alfred russel]

too bad, because it is a neat idea.

But I would need to wire money to it, as they have this extra internet security shit for cards which my card doesn't have, and I am not sure which hungarian banks carry it yet.

A Hungarian looking for ways to get his money out of Hungary right now? Win!

A Hungarian looking for ways to get his money out of Hungary so he can get them into a quasi legal foreign gambling site that has been accepting wagers on whether it will stay in business? Fail!

[DGuller]

There is now a 4.6% unallocated to either Obama or Romney on Intrade.  Is there really such a high chance that neither of them would be elected?  Seems like a good arbitrage opportunity to me by being long for both, especially since it seems like there are no transaction fees now.  You can close out the position when that gap narrows.

[Ed Anger]

Invest in Bitcoins. All the internet nerds do.

[alfred russel]

There is now a 4.6% unallocated to either Obama or Romney on Intrade.  Is there really such a high chance that neither of them would be elected?  Seems like a good arbitrage opportunity to me by being long for both, especially since it seems like there are no transaction fees now.  You can close out the position when that gap narrows.

What got me to join Intrade briefly was that there was a 6% chance Ron Paul would be the nominee. I estimated the odds were zero, so that was a good bet.

The odds that one of Obama or Romney won't be elected seems high, but it isn't zero. Haven't one in ten presidents been assassinated? Romney is in his 60s, Obama a bit younger (early 50s?): what are the odds of a major health crisis for them (you are the actuary). There could also be a major scandal that could prompt one to drop out.

I don't think putting the odds at 2% is unreasonable. After taking into account the spread and fees (I can't remember the details, but I think they come out of the winnings), you will be lucky to lock in 4% odds. Is it worth it to send your money to a sketch betting site in Ireland for 6 months to collect an expected 2% return on investment?

[DGuller]

There is now a 4.6% unallocated to either Obama or Romney on Intrade.  Is there really such a high chance that neither of them would be elected?  Seems like a good arbitrage opportunity to me by being long for both, especially since it seems like there are no transaction fees now.  You can close out the position when that gap narrows.

What got me to join Intrade briefly was that there was a 6% chance Ron Paul would be the nominee. I estimated the odds were zero, so that was a good bet.

The odds that one of Obama or Romney won't be elected seems high, but it isn't zero. Haven't one in ten presidents been assassinated? Romney is in his 60s, Obama a bit younger (early 50s?): what are the odds of a major health crisis for them (you are the actuary). There could also be a major scandal that could prompt one to drop out.

I don't think putting the odds at 2% is unreasonable. After taking into account the spread and fees (I can't remember the details, but I think they come out of the winnings), you will be lucky to lock in 4% odds. Is it worth it to send your money to a sketch betting site in Ireland for 6 months to collect an expected 2% return on investment?

It seems like transaction fees are a thing of the past, there is now just a monthly account fee.  That should certainly make arbitrage strategies more profitable.

I'm actually itching now to get into the game, for the price of one bad poker night.  I'm curious to see if I can make some mint collecting nickels in front a steam roller.  Yi, how did you fund your account?

[alfred russel]

It seems like transaction fees are a thing of the past, there is now just a monthly account fee.  That should certainly make arbitrage strategies more profitable.

I'm actually itching now to get into the game, for the price of one bad poker night.  I'm curious to see if I can make some mint collecting nickels in front a steam roller.  Yi, how did you fund your account?

Interesting, it was 2008 since I had an account there (though I think I may have left a penny in there so I didn't have to open a new account if I wanted back in, lol if I have been getting charged account fees).

I think you can make money, but the markets have to be liquid. In addition to Ron Paul, I made money betting on primary races when the polls were showing 20+% advantages but one person was registering 5% or so. The problem was I couldn't bet much, because the liquidity wasn't there.

I made about 10% overall, which included a loss on one bet I made (where I made a real bet and lost on when Huckabee would withdraw).

[DGuller]

I'm actually trying to see if I can take advantage of bad liquidity.  I assume that automatic trading algorithms aren't scouring Intrade, so I don't have to compete with them.  I multiplied my starting capital many times over on fake Intrade by taking advantage of market anomalies rather than making good bets (but then it became too efficient, at which point I multiplied it many more times by making good bets).  Of course, market making is a lot more risky than arbitraging linked bets, but hey, if I lose, it's like a bad night of poker.

[alfred russel]

I'm actually trying to see if I can take advantage of bad liquidity.  I assume that automatic trading algorithms aren't scouring Intrade, so I don't have to compete with them.  I multiplied my starting capital many times over on fake Intrade by taking advantage of market anomalies rather than making good bets (but then it became too efficient, at which point I multiplied it many more times by making good bets).  Of course, market making is a lot more risky than arbitraging linked bets, but hey, if I lose, it's like a bad night of poker.

Probably not, for three reasons:

1) If you get a bite on a lightly traded account, congrats, you might have just made $5.
2) If you are posting unlikely bets for someone else to grab, you may find that events transpire to make the events more likely before you can take the bet down.
3) If you are waiting for someone else to post a stupid bet, assuming you aren't going to quit your job someone else probably has more time than you. And if you are going to quit your job, when you find success congrats, see #1.

[DGuller]

I'm actually trying to see if I can take advantage of bad liquidity.  I assume that automatic trading algorithms aren't scouring Intrade, so I don't have to compete with them.  I multiplied my starting capital many times over on fake Intrade by taking advantage of market anomalies rather than making good bets (but then it became too efficient, at which point I multiplied it many more times by making good bets).  Of course, market making is a lot more risky than arbitraging linked bets, but hey, if I lose, it's like a bad night of poker.

Probably not, for three reasons:

1) If you get a bite on a lightly traded account, congrats, you might have just made $5.
2) If you are posting unlikely bets for someone else to grab, you may find that events transpire to make the events more likely before you can take the bet down.
3) If you are waiting for someone else to post a stupid bet, assuming you aren't going to quit your job someone else probably has more time than you. And if you are going to quit your job, when you find success congrats, see #1.

This is obviously a game more than anything.  I don't expect to get the same return on my time investment that I can get by showing up for work.  I realize that profit potential is very limited.  However, I still want to see if I can get some respectable return without ever truly betting on anything other than not being pulled under the steam roller.

[Zanza]

I don't think putting the odds at 2% is unreasonable. After taking into account the spread and fees (I can't remember the details, but I think they come out of the winnings), you will be lucky to lock in 4% odds. Is it worth it to send your money to a sketch betting site in Ireland for 6 months to collect an expected 2% return on investment?

I am sure they have a guarantee from some Irish bank that they'll repay ... oh ... 

[Admiral Yi]

Yi, how did you fund your account?

I haven't managed to open the damn thing yet, but when I do I'll use my credit card.

I don't think there are any arbitrage opportunities BTW; long and short positions aren't traded seperately, they're just reciprocals.

[DGuller]

I haven't managed to open the damn thing yet, but when I do I'll use my credit card.

Congrats on your move out of US.  What's the lucky country where you're living now?

I don't think there are any arbitrage opportunities BTW; long and short positions aren't traded seperately, they're just reciprocals.

I'm not sure what one has to do with the other.  A very simple case of an arbitrage opportunity exists when someone bids 50% on Obama, and someone else bids 55% on Romney.  You sell both of them a contract, get $10.5 from sale, lock up $10 in margin account (only $10 and not $20, because the two contracts are linked), and thus instantly pocket a guaranteed profit with zero capital outlay.  Of course, you don't really see those opportunities, since Intrade isn't that horribly inefficient, but it's technically possible.

[Admiral Yi]

Congrats on your move out of US.  What's the lucky country where you're living now?

Is it illegal in the US?  Would have been helpful information when I first raised the issue you know.

[DGuller]

Congrats on your move out of US.  What's the lucky country where you're living now?

Is it illegal in the US?  Would have been helpful information when I first raised the issue you know.

I didn't know you didn't read their FAQ.    You can't fund your account with a credit card from US.  It's not illegal, just impossible.