This week they added 15 more states and trading on who will win those--for some reason not NY (and I'm assuming it's not because it's too one-sided--they have IL).
New Ones
A few showed big momentum after Obama's win in SC yesterday. In most he moved up. CO actually had a poll out today showing Obama in a slight (statistically insignificant) lead, which threw that state's trading into turmoil. He also rose a lot, or Clinton dropped a lot (but not necessarily both) in some of the Southern states: AL (both), AR (Clinton drop), TN (Clinton drop).
When the races are contested, the sum of the trading values (considered to be like probabilities) can add up to a lot more or less than 100--which should be a temporary condition driven by a few traders with strong ideas. The contracts are traded independently, though no doubt many traders work both sides for both candidates.
Obama clearly leading: AL 70-26, GA 82.6-35, IL 95-5.
Contested:
- CO 60-65 (!),
- KS 75-45 (Obama way up to day--perhaps it was discovered his mother was from there),
- MA 36-85 (Obama down 14 today; state in flux with Kennedy about to announce his endorsement),
- MN 75-40 (big movement up for Obama and down for Clinton today),
- MO 67-70 (Obama up 22, Clinton down 15 today, which still adds up to over 130%),
- NM 50-70 (very unstable),
- TN 47-55 (very interesting; Clinton down 27 today).
AZ 30-75, AR 17-67, CT 7-87, OK 21-65, NJ 25-82 (despite some firming for Obama today),
UT 42-70 (with 25 for "Field"--an Edwards stronghold? Or Mitt-mania spilling over to the Dems?)
Summary: Despite some interesting movement, HRC is still deemed likely to win a plurality of the 16 states above. By my count, 7 to 3 with four races' markets (NM, MO, MN, and KS) in chaos and two (TN and CO) judged to be very close.
The Main Event
Clinton to win CA is now at 80(%), Obama at 22. Last night Obama closed at 30, and today it traded between 18 and 25 for the most part.
This is a big disconnect with the probability for Obama to win the nomination, which is at 37.6 (Clinton at 62), up quite a bit from yesterday's average trade of around 31, and up a little less from the opening trading today at 35.
As I've suggested before, either that number is too high (and I'm not believing it is anymore) or the CA number for Obama is too low/Clinton's too high, or I'm completely wrong and a Democrat can actually win the nomination without winning CA. I'm betting on the middle case, not taking much risk on the nomination itself yet. Looking at the Order Book, there is some support for selling Obama in CA if he gets up to 40%, which makes sense to me.
The Non-Event
Trading in the Republican states, particularly the ones just added to the list of markets available, has been light so far, and most states have way over 100%--which means to me that a few partisan traders have entered their opinions, but most have no clue what's going on. Include me among those: I have no knowledge about state party races for the Republicans.
I think trading on these new markets will be very light until after the Florida vote on Tuesday. Then, perhaps, some ideas will clarify about whether McCain or Romney is winning the overall race (FL trading is spirited for both right now, with Romney leading on the basis of the most recent polls with him ahead), and whether Giuliani is still around, and whether Huckabee is still a serious factor in the Southern states.
Overall, the McCain for President number has gone up a bit too much (at 22, vs. Clinton at 38 and Obama at 20; I bought some of him at 15 a week ago), and I think I'm going to short him a bit. He hasn't proven he can win a closed Republican primary yet, and he will need to in order to get the nomination. After Florida, if he wins I'll reduce my risk on the best terms available; if he loses his price will plummet and I will take my profit.
Note that the penalty the Republicans imposed on early unauthorized states (of 1/2 their delegates) doesn't seem to have prevented competition in those states, whereas the Democrats' unyielding (but untenable) position in FL and MI has worked (except for HRC wanting to change the rules at this late date).
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A day later, and some of these markets have firmed a little. Trading ranges for some of the contested states now seem to be indicated, if not established.
Obama ranges for MN are 40-50, MO 20-40, MA 20-40, and TN 30-50. CO, on the other hand, seems to be stabilizing around an expectation that Obama will win the caucuses there (40-70 range).
NM is not stabilized, while in KS--that's Kansas!--Obama has consistent support over 50%. That one I won't believe, but neither would I bet against.
Generally there seems to be more support for selling Obama if he gets too high than for buying Clinton if she goes too low. Which doesn't really make all that much sense.
CA is too low at 18% for Obama; Obama's odds to win the Presidency are about the same (actually higher). Now, I know that I consider Obama's winning CA to be the final great test for him, and that the nomination, then the Presidency, will both fall to him if he can do it, but from a probability standpoint, that makes no sense. There is surely some chance that Obama can be derailed between Feb. 5 and Nov. 4, while I think there is virtually no chance he can win the nomination (or the Presidency, of course) without winning CA.
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