Thursday, August 03, 2006

When information is scarce...

...let markets get the job done. There's nothing like a little profit motive to get information to the surface.

(Dave, that picture is just for you.)

There was quite a hubbub a while back on betting markets for terrorism. BetUS.com has a moneyline set up for the month in which Fidel Castro will pass. As of 9:30AM on Thursday morning, the board shows the following:

August 2006................+350
September 2006.........+400
October 2006..............+500
November 2006..........+600
December 2006...........+600

(Moneyline bets yield the positive amount for each $100 increment bet. Thus, a $100 bet on October would win $500. M0neylines can also bet negative; if September were to read -180, then it would take a $180 bet to win $100. Bets don't need to be in $100 amounts; the ratios hold to all levels.)

I would have guessed that Castro would have been in a lot worse shape than the figures seem to indicate. Then again, betting markets are about flushing out and profiting off of new information-- are those with better information (read: Cubans) in a position to be able to profit from that advanced knowledge?

1 comment:

roluby said...

Your simple explanation of moneyline wagers has brought a tear to my eye.