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Interesting artbitrage opportunity

October 22, 2007

Although I am staying out the various Al Gore markets on Intrade.com I have noted two interesting arbitrage opportunities:

1. The price on Al Gore winning the Democratic nomanation is 5.2-5.6 while the price on him getting into the race in the first place is 10-15 (with the last price trade taking place at 10). This suggests that Gore has over a 50% chance of winning if he gets into the contest (which is simply unrealistic).

2. The price on Al Gore becoming the next President is 5.3-5.5, roughly the same as the chances of him winning the nomination (which is patently absurd).

Of the two, the first arbitrage opportunity is the most illogical. After all, he could not win the nomination and then run as an independant while the chances of him being drafted as a candidate during the convention are next to nothing. However, although I believe that this is certainly a year for a viable independant candidacy, I feel that another fan of climate change legislation (if he doesn’t win the GOPs nomination) will fufill that role. Furthermore, the price on an independant victory is still only 1.4-1.7 making a mockery of the prices.

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