USA Presidential Election 2008 – Early speculation for betting, trading and charts

The United States Presidential Election of 2008 is scheduled to be held on November 4, 2008. The two major parties for candidacy are the Democratic Party and the Republican Party. Currently the available odds for betting on them are 1.50 and 3.00 in Betfair. Although it's rather early to really discuss about the winner, it's quite interesting to examine the politics betting markets and take account previous similar events. I have already showed how we could trade during the Greek Elections in 2007 and how we could take advantage of different bookmakers by arbitraging the fixed odds.

However, the US Elections will be held in one year from now, so we have plenty of time to do our research and speculate how the market reacts in the future. For the time being we should consider the elections as a long-term betting and trading opportunity. Having that in mind, it has been known for quite some time that these long term kinds of bets follow usually a common betting pattern. And that is the favorite always to shorten and the outsider always to drift. We can see that upon checking the article about trading the winner of Eurobasket 2007 and during the Euro 2008 Qualifying Stage .

In other words, we should back Democrats now and lay in November 2008 or lay Republicans and back them later. Of course, that would be a correct strategy if the odds behave in the same manner as before. Otherwise, we will have difficult time to close our position.

The US election will be greatly influenced when the candidates will be decided for each party. While Hillary Clinton is favorite for the Democratic candidacy, the Republics have a dilemma between Rudolph Giuliani and Mitt Romney. The Betfair charts show a downtrend for both regarding the fixed odds, so we can't be certain who the clear favorite is although Giuliani is trading at 2.34 for the time being.

Finally, there is a special bet combination available for the specific US election. That is "Female President" and "Democratic Candidate". Hillary Clinton's odds fluctuate around 1.36 and "Yes" for a female president is available at 1.78. If Clinton isn't elected, "No" wins in the other bet except if the Republics elect a female (low probability according to the odds)! However, if she does elect, the market of "Female President" won't be settled since she still needs to win the Presidential race! Let's examine each scenario's probabilities according to the markets' odds.

 

a) "Clinton to be elected for Democrats" is 74.62% (1.36).

b) "Female president to be elected" is 56.18% (1.78).

c) "Democrats to win the election" is 66.6% (1.50).

So, if you do believe Clinton to be the next USA president, you want (a) and (c) to be true and given the fact that there is no other favorite female candidate, (b) will also be true. (a)% multiplied by (c)% equals to 49.69%. Compare that to (b)% and you can start thinking a bit deeper.

In conclusion, let's see all the possible scenarios:

Unlikely scenarios are:

• Clinton wins, female wins, democrats lose (Republics to elect female).
• Clinton loses, female wins, democrats lose (Republics to elect female).

Highly unlikely scenario is:

• Clinton loses, female wins, democrats win (Democratics to elect female other than Hillary).

Impossible scenario is:

• Clinton wins, female loses, democrats win.

There's been a new article on US Election concerning Super Tuesday written on February 6, 2008 .

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