Monday 21 December 2009

Year end clearance sale: event derivatives

iPredict has a bunch of contracts that close 1 January 2010: 12 days from now. Here are some with standing buy orders that seem incredibly likely to resolve at 0 or 1.
  1. Foreshore and Seabed Act (2004) to be repealed in 2009: bids from $0.0114 down. No way this can happen with the number of sitting days left in Parliament for the year, not with zero notice.

  2. NZ OCR to drop below (2.5%, 2%, 1.5%, 1%) in 2009; note that there are no scheduled OCR revisions between now and 28 January, so it would have to be an extraordinary thing for RBNZ to step in with an unscheduled drop. Bids ranging downwards from $0.0121

Recall that even a 1% return over 12 days is ... rather larger than that as an annualized return.

These below are less sure things, but still seem overpriced with 12 days to go:
  1. NZX50 to close 250 points lower than it opens on any day in 2009: bids from $0.0192 down.

  2. Winston Peters to remain sole leader of NZ First in 2009: asks from $0.9832 up

  3. Peters to share leadership of NZ First in 2009: bids from $0.0205 down

  4. Phil Goff to be replaced as Labour leader in 2009: bids from $0.0148 down

  5. Annette King to be replaced as Labour deputy leader in 2009: bids from $0.0168 down

  6. Jim Anderton to announce in 2009 he will not stand in next election: bids from $0.0249 down (possible as part of a Christmas letter, I'd reckon)

  7. Second Minister to depart in 2009: bids from $0.018 down

  8. National/Maori Party agreement to be terminated in 2009: bids from $0.0158 down

  9. National/ACT agreement to be terminated in 2009: bids from $0.013 down

  10. Mugabe to lose Zimbabwe Presidency in 2009: bids from $0.018 down (will he die in the next two weeks? Odds seem less than 1.8%

  11. North Korea to fire a missile at a foreign country in 2009: bids from $0.0192 down

  12. Ahmadinejad to lose Iranian leadership in 2009: bids from $0.0205 down

  13. NZX50 to close below (2250, 2000, 1750, 1500) on any day in 2009 (NZX50 currently at
    3150): bids ranging downwards from $0.0180 depending on contract

  14. S&P 500 to close below (650, 600, 550, 500) on any day in 2009; index currently at 1100. Bids ranging downwards from $0.018.

If you've free cash sitting around in your iPredict account and it's looking for a home, or if you've room to deposit more cash into your iPredict account, and you don't want to have to worry too much about sitting and watching your stocks over the holidays (so the option value of having cash in the account in case of big bargains showing up is low), then have a gander....


  1. Are you sure you are including any relevant transaction costs? On Tradesports/intrade, where I have the most experience, transaction costs are per-contract, and as a result are a much larger share of small probabilities. You can't make any money betting on $0.01 price for 0% things there, the contract expiration fee takes the whole profit.

  2. @Paul: I've lost about $20 on Mugabe as well.

    @Patri: There's a small fee on withdrawals if you make money on your overall trading, otherwise no fees.

  3. Also worth a look is the US.BANKFAIL.09 stock. Unlike the others above it is an indexed stock, not a binary, but with a price of 80c and with 140 banks having already gone bankrupt this year it is free money for every additional bank failure.

  4. It was at 84 when I'd checked, so looked right; it's now at 86.