Monday, 3 November 2014

The UKIP battleground in November 2014

You're probably getting the hang of this now.  I've looked in turn at Labour, the Conservatives and the Lib Dems, and now it's time for my look at the constituency betting markets as they currently stand from UKIP's perspective.

So here's the table of all the seats where UKIP's chances are ranked by the bookies as 16/1 or better, ranked in ascending order of implied probability:

To recap for first timers, this table is compiled on the basis that in aggregate the constituency odds are our best estimate of what's going on, while noting that there may be individual anomalies (otherwise known as betting opportunities).  The constituency odds factor those matters in to the best judgement of bookies and punters. By arranging constituencies by order of odds rather than majority, we can see how many seats gamblers expect the parties to take - or what the odds are that each party will take a given number of seats.

These figures are up to date as at 31 October 2014.  There are no Scottish seats on this list, so the unavailability of the Scottish market is not a problem here.  This is a fast-moving set of prices and is already out of date in some respects (for instance, UKIP are now 5/1 in Rother Valley).  But I have to call a halt somewhere.

The first thing to note is how far UKIP have come in a very short time.  They are now odds on in four seats, favourite in a fifth and below 2/1 in three more, with no general election market in Rochester & Strood yet.  As recently as April, their shortest priced seat was Thanet South at 9/4.

You can get 1/14 with Corals that UKIP will get at least one seat.  This isn't so much a bet as a 7% tax free return over a six month period.  Corals, however, are not covered by the Financial Services Compensation Scheme.

You can get 8/13 with SkyBet that UKIP will get five or more seats and 4/6 with Paddy Power that UKIP will tally more than five seats.  At today's constituency prices, both prices are a bit too short.  But on what currently looks like the fairly safe assumption that UKIP takes Rochester & Strood in comfort, it seems more likely than not that there will then be one or more further defections to the kippers.  If so, these prices are unlikely to last.  Take these bets now.  You should be able to hedge them at a profit later if you think that UKIP are too short priced in the constituency markets.

UKIP now are rated at shorter than 10/1 in no fewer than 42 constituencies (including Rochester & Strood, which will undoubtedly feature in this group after the by-election).  And it is clear who UKIP are threatening most: 29 of these 42 constituencies are currently Conservative-held.

There are 129 seats on the whole list and the pattern continues with the longer shots. 79 are Conservative seats, 40 are Labour held and ten are Lib Dem seats.  Even if the Tories fend off UKIP, their impact could be fatal on the Conservatives in a different way - in eight of these seats Labour are priced at under 2/1 and Labour is at 5/1 or under in a further ten seats.  Splitting the right-wing vote might well be lethal to the Conservatives' chances of forming the government after the next election.

With UKIP prices continuing to come in fast, we in a bull market.  The question for now is not whether the prices are justified as what is going to happen next and are there going to be further shortenings such that we can hedge at a later date if necessary?  And the answer is clearly yes.  All you need to be an investment genius is a bull market and a short memory.  Time to develop amnesia and dive in.

After Rochester & Strood we can expect a spasm of further shortening of UKIP prices in a host of constituencies.  We can expect the particularly favoured constituencies to be Conservative-held seats on the Thames estuary and in Lincolnshire.  To ensure that I am able to hedge later if necessary, I'm choosing constituencies where UKIP are already quite short priced.  I've chosen Thurrock, Louth & Horncastle, Dover and Gravesham, but there's no magic in that choice of seats.   Right now, the key is to have made a good selection of UKIP bets.  I'm not worrying too much right now whether the price is right on fundamentals.  I should if necessary be able to lay them off at a profit later.

This is not exactly a complicated strategy.  But I see no reason for complexity at present when it comes to betting on UKIP.

Tomorrow, I turn to the SNP.

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