I saw this article in the Financial Times about a new idea: fixed-odds-betting for the stock market. The guy who wrote the article suggests that watching the odds on these sites can gives clues about market expectations.Here's the article..... Talking Stock: If you can't stand the heat. . . By Philip Coggan - Jun 13 2001 14:51:36 Those who like to speculate on the stock market are not short of options - or indeed futures. But a new vehicle has entered the fray - fixed odds betting. Spread betting has been around for a while, of course, and has been very successful in its niche market. But for many small investors, spread betting carries too many risks. Effectively, if you want to win £1,000 through a spread bet, you have to be prepared to lose the same amount. Fixed odds betting is a lot more familiar. If you want to bet £5, you can be sure that you will lose only £5. Of course, this also means that your gains will be limited. You will have to put down a big stake if you want to get rich - the odds available tend to be those that attach to the favourites in horse races. The bookmaker Fixed-Odds Capital offers websites at http://www.xodds.com and http://www.betonmarkets.com. What makes the site interersting, even if you don't want to make a bet, is the insight it gives you into the way markets are thinking. You can use the site to design your own bet. Say, for example, you want to speculate that the Dow Jones Industrial Average will rise over 12,000 within the next 60 days. The site will tell you how much you need to stake to win a given sum, say $100. Jean-Yves Sireau, the former hedge fund manager who operates the sites, says that the company uses complex mathematical formulae to calculate the odds, based on the cost of hedging the bets in the derivative markets. So if the odds you are offered on the Dow hitting 12,000 are 3:1, that is roughly the probability that the markets attach to such an outcome. And there is a fair amount of flexibility attached to the bets available. You can bet for example on the Dow staying in a fixed range, say between 10,000 and 11,000 - or bet that it does not touch a given level, such as 9,500. Fixed-Odds operates, for tax reasons, from Malta and the Cook Islands which might give some UK investors concern. But Sireau says it is in the process of setting up in the UK. When it does so, it will fill in some of the gaps in its coverage - for example, it does not take bets at the moment on the FTSE 100. I recognise that there are plenty of investors out there who like a bit of a flutter. But I should add that the way to get rich through the stock market is not through betting - but through steady saving over a long period. Nevertheless, I will be looking at the Fixed-Odds sites, from time to time, to see what insights they can give us into market expectations.