My other criticism of you is that it's stupid to make that trade now. The odds are not going to change much between now and Nov. Why lock up your capital for 7 months when it can earn a return somewhere else and then place the bet the night before the election? It's just pure stupidity in my opinion. Obviously you are not aware of the term opportunity cost.
I don't work in politics and I don't claim to be a politician. But then I don't need to be, any more than I needed to be an expert on automobiles to short GM into bankruptcy, or to be a housing expert to profit from the collapse in homebuilders, to know computers in order to profit from Apple, and so on. Seeing the future better than the masses is my strong suit, and that is the skill required to make money from speculating. It is a generalist skill not a specialist one. Feel free to propose an over/under on my IQ, it will amuse me to know how accurate your assessment of other people is.
You are not answering my question. Why would you make the trade now? Can you please just answer that for me? I don't care who you vote for or which side of this bet you are leaning on. I am simply fascinated by the stupidity of tying up capital earning no rate of return for 7 months to make a binary bet that you could make the night before. Can you walk me through your logic?
Santorum is a joke of a awkward, skill lacking, biased candidate who will never beat Obama and will bring the same junk Palin brought with her on the ticket. HE SUCKS! Romney also went to Stanford, Harvard, and some other school I do not recall. Santorum went to................... Penn State:eek:. Stick with Romney and hope Rubio or someone will accept/change their mind.
The logical assumption to make is that I think the odds the night before the election may well be worse than one is able to get today. It is silly to think that someone who studied economics and speculates full-time for a living is unaware of basic concepts like opportunity cost. As for why I think the odds may well get worse - take a look at the stock market, it's now in a confirmed bull market. The economic data has steadily been improving. The Fed has declared they will stay on hold for 2 more years at least. The ECB has de facto adopted QE. It is not only conceivable, but quite likely that these factors improve by November, all of which will boost Obama's chances, just as they have done in the last few months (where his odds went from 45% to 60%). Furthermore, once the Republican candidate has been declared, it will now be open season. Obama vs Romney (or Santorum, lol) in debates live on TV, competing speeches across the nation. Who do you think is going to come out better there? Romney and Santorum are not exactly renowned for their oratorical skills, whereas Obama is a natural as he showed in 2008 (one of the reasons I backed him then as a big underdog). It is my view that the further we go, the more the Republican ticket will weaken in the polls. Now, you may disagree with this, and I look forward to seeing your reasoning for why you think Obama's chances will fall from here on. But it is incorrect to say that my reasoning is stupid. Maybe it will be proven wrong, in which case I stand to lose a fair sum of money. But to demonstrate it is stupid you have to do more than spend a few minutes posting some unsupported assertions.
No, I don't think you understand my argument. I may even take the same side of the trade as you. I'm not questioning the trade. I'm questioning the timing of the trade. I don't care how much the market moves against me. I can make far more money trading in the next 7 months then I'm going to lose by having to pay up on the Obama spread. That's my point. On a side note, historically, spreads get very tight going into the election. Rarely do they widen. The reason for this is because as you get closer to the event (less time) the more binary the bet becomes. You'll see.
The research shows that historically, strong candidates have no problem getting enough money to run a successful campaign. Money flows to charismatic and credible politicians, not the other way round. This is the internet era - dirt gets dug up in days or even hours. The idea that you can hide scandal by waiting for after the primaries is laughable. Debating in the primaries allows you to hone and show off your debate skills to build support, as Obama did to great effect in 2008. It also lets the party assess your strength in a key political skill, rather than gambling on an unknown. You are going to get bruising debates once you start running anyway, and if you can't out-debate your own party challengers, how are you going to win over an incumbent with all the media advantages that the office of president enjoys? You still haven't suggested who this miracle candidate will be, or what you think the odds are that one will appear and get selected.
You are not reading my posts so this conversation has become quite challenging. Slow down and re-read what I said and get back to me. Thanks.
If you are employing all your spare cash to fund high probability trading, that makes sense - for you. It doesn't make sense for someone with low or no leverage who can easily fund the bet, and whose trading size is limited by potential volatility of returns rather than spare funds to meet margin requirements. If the spread goes down then obviously I've made a mistake by deciding to accumulate more here, I agree. But I think the odds favour the spread staying the same or widening in Obama's favour.
But you said you were a highly successful speculator. I just thought surely you could earn a return on your money that is greater then what you will lose on the spread moving against you over the next 7 months. Do you understand what I'm saying? Let me walk you through this. Say Obama is trading at 60 right now and let's say that between now and Nov he actually does move higher like you suggest to say 70. That means all you have to do is earn a 15% return between now and Nov to offset the loss in the spread going up. Are you telling me that you can't earn 15% on unleveraged money between now and then? That is my point. Because if you can, then I would tell you to keep trading or investing with that same money and then the night before the election, lay your bet. You might even make more then 15% between now and then and maybe, just maybe, the spread may trade down to 52 or 55. Either way, it's stupid to forgo that opportunity cost and lock up your capital that long because of "fear" that you may have to pay up a few percent. That's all that I'm saying.