why is the tradesports contract at 88 and not 100?

[b00000000000m]

[ QUOTE ]

hmmm, i never really knew the details of how the bidsworked. currently there is a bid of 91.0 with a quantity of 400. what does that mean exactly?

[/ QUOTE ]

OK, I was being a bit loose with the language before. Technically, "Bid" means only "offer to buy" and "Ask" means "offer to sell." I used the phrase "bid to sell" and also once or twice talked about "shorts" when I just meant "offers to sell."

So, right now there is an Ask at 91 for Quantity 400. I think that's what you're referring to. That means you can buy 400 contracts at a price of $9.10 per contract before fees ($9.15 per contract after fees). If an appropriate law is signed, you will be credited $9.90 per contract (there's a $0.10 fee per winning contract).

Total cost is 400 * $9.15 = $3,660.
Total payout in the event of a winning contract is 400 * 9.90 = $3,960.
Total profit = $300.


One note of caution is that the bill that was passed might not actually meet the contract's requirements. The Rules state:

The contract(s) will be expired at 100 if (including but not limited to): "... a new law that amends the federal criminal code..."


The new law amends US Code Title 31, Chapter 53, "Money and Finance - Money - Monetary Transactions." The federal criminal code is US Code Title 18, Chapters 1 - 601. Now, the language in the bill pretty exactly matches the rest of the language in the Rules, so one would think that the "including (but not limited to)" language in the rules will allow TradeSports to expire the contracts at 100. I would guess that if you call TradeSports and ask them whether the law that was passed, if signed, would qualify, they will tell you yes or no.

[Mr.K]

From TS Support staff:

"Hi xxxxx,

Thank you for contacting the Exchange Operations Team. If this current bill is signed by the President, then the contract will expire at 100.

If you require any further assistance, please do not hesitate to contact us.

Kind Regards,

Brian
Exchange Operations
Trade Exchange Network Limited
(incorporating www.tradesports.com, www.intrade.com & www.tradebetx.com)"


So pretty much the people offering those hundreds of contacts are giving away money.

[Utah]

[ QUOTE ]
From TS Support staff:

"Hi xxxxx,

Thank you for contacting the Exchange Operations Team. If this current bill is signed by the President, then the contract will expire at 100.

If you require any further assistance, please do not hesitate to contact us.

Kind Regards,

Brian
Exchange Operations
Trade Exchange Network Limited
(incorporating www.tradesports.com, www.intrade.com & www.tradebetx.com)"


So pretty much the people offering those hundreds of contacts are giving away money.

[/ QUOTE ]Cool. I just bought 100 contracts. I wish I had more in my account to snap up the 300 or so still remaining.

[b00000000000m]

Just picked up a few myself--there's an Ask at 89.9. Apparently Bush will sign the bill within a couple of weeks. Even if it's a month before the contract is expired at 100, this is a pretty decent annualized rate of return even net of fees (118%, if I did the math right).

Too bad I don't have ACH set up with Tradesports and don't have any spare money in my Neteller account. The plan is to deposit $250 / day (the credit card max) and snap these up while they're still around.

[Lori]

[ QUOTE ]
So pretty much the people offering those hundreds of contacts are giving away money

[/ QUOTE ]

Assuming that TS works identically to Betfair, those people are freeing up funds.
If they can settle now for 90% of the value, but use those funds to make 1% profit every day on other events, they would profit assuming it takes ten days to be signed (For example, I'm aware it may be sooner.)

Lori

[b00000000000m]

Another (very minor) consideration is that by selling now as a price-maker, they avoid the $.10 per contract expiration fee.

[Mr.K]

[ QUOTE ]
[ QUOTE ]
So pretty much the people offering those hundreds of contacts are giving away money

[/ QUOTE ]

Assuming that TS works identically to Betfair, those people are freeing up funds.
If they can settle now for 90% of the value, but use those funds to make 1% profit every day on other events, they would profit assuming it takes ten days to be signed (For example, I'm aware it may be sooner.)

Lori

[/ QUOTE ]

Damn you people are smarter than me on these financial things. GOod point, and one I'd never have thought of myself. I guess for someone like me who does not have an edge on any other bets offered by TS, however, and who can get only ~5% on a short term CD, taking the short term 10% they are laying on the table is a good move.

[Mr.K]

[ QUOTE ]
Just picked up a few myself--there's an Ask at 89.9. Apparently Bush will sign the bill within a couple of weeks. Even if it's a month before the contract is expired at 100, this is a pretty decent annualized rate of return even net of fees (118%, if I did the math right).

Too bad I don't have ACH set up with Tradesports and don't have any spare money in my Neteller account. The plan is to deposit $250 / day (the credit card max) and snap these up while they're still around.

[/ QUOTE ]


Bush will sign the bill this week or next, FWIW. He may sign as soon as tomorrow, I hear.

[Mr.K]

Quick question -- is there a consensus among those of you posting in this thread that speculation on current events (such as the TS net gambling ban contract) is covered by the Act itself? I have read the language a few times and cannot decide exactly where the line falls in this very specific case. I gather financial institutions will cut TS off once they figure all of the regs out, since TS is primarily a sportsbook, but it would be nice if they segregated their current events exchange, since that may be in the clear even under the new language in the SAFE Ports Act.

[otctrader]

Small risk of complications/delays in cashing out for U.S. bettors when the law goes into effect, not sure how to quantify it - this goes hand in hand with the opportunity cost of having funds tied up.