Spread Betting on the UK General Election
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Political Spread Betting

Political Spread Betting

Where to Spread Bet on the UK General Election?

A number of firms offer spread betting on a range of political events such as the outcome of elections and referendums.

Politics Analysis & News

Date Trading Update
18-Mar-15 [3:17pm]

Osborne's Pre-Election Budget 2015: A Strictly Political Affair

This was a heavily politicised Budget, as expected, that on the surface turned out fairly well for the Conservatives.

Many claim that the actual content of a pre-election Budget doesn't matter, but merely the impression it gives off.

Osborne seemed to do a good job of treading the line between highlighting the UK's strong recovery yet emphasising that the recovery isn't over, whilst including some tantalising changes to the tax free allowance, ISAs and pensions.

The usual Tory lines over the 'chaos of the past' were present, with Osborne calling Britain the 'comeback country'.

Oil Price Falls Makes it Harder for Labour to Score Points

Yet Labour did make some strong points in their response, especially the issues over the glaringly absent NHS, the dubious nature of the Tory's higher living standards claim, and the fact that the jobs situation isn't quite as rosy as the Tories keep stating.

Frustratingly for Labour, however, this election has coincided with a downturn in global inflation due to the oil price crash, and on home soil the supermarket price war, a big boost to the coalition's current economic figures.

As Andrew Tyrie, Chair of the Treasury Select Committee said as the MPs were leaving the chamber, it's very hard for an opposition leader to respond to the unseen Budget when the economy is bad, let alone when the economy is strong.

And Labour will likely suffer due to the nature of the Budget coverage; it's Osborne's moment to shine and the focus will largely be on what he said rather than what Labour accuses him of leaving out.

What could harm the Tory's, however, is there insistence that living standards are rising; if this doesn't ring true with the electorate, then Labour's claim that the Conservatives are far removed from the public will only gain in legitimacy.

Post-Budget Election Expectations Little Changed

In the post-Budget landscape the outcome of the election remains unclear.

In the important General Seats spread, the Conservative have slipped slightly to 280-286 from 281-287, with a big sell off last week being followed by an unsurprisingly flurry of buys ahead of Osborne's announcement.

Labour have also slipped, to 271-277 from 273-279, with the continued glacial pace of either party's gains hurting Miliband more than the incumbent Tories.

The biggest movement was found in the Most Seats spreads: the Conservatives have now grown to 63.6-71.5, whilst Labour has fallen to 28.5-34.8, with Ed Miliband's insistence that Labour won't utilise a SNP/Labour coalition hurting the party's odds.

Update by Connor Campbell, Financial Analyst, Spreadex
16-Mar-15 [12:17pm] The latest update on our blog takes a look at what the upcoming UK budget might look like and the potential impact on sterling.

How Will the Budget Impact Sterling and the UK Economy?

Update by Jenna Cutly, Editor, CleanFinancial
13-Mar-15 [2:48pm]

UK General Election Spread Betting Markets

As we head towards the last UK budget before the general election, Alastair McCaig from IG discusses the trading options available for those looking to take a position.

One new binary market asks whether Alex Salmond will be part of the next cabinet, whilst another considers whether there will be a second general election in 2015.

Update by Alastair McCaig, Market Analyst, IG Index
13-Mar-15 [10:11am] Will Alex Salmond Make His Way into the Cabinet?

Next week's UK budget should see the City's attention finally switch away from Europe and onto the looming May election.

The IG election trades suggest a hung parliament leading to a David Cameron-led coalition government, along with the SNP picking up 42 of the 59 Scottish seats on offer.

The 16.5% chance that Alex Salmond could then find a seat in the cabinet does not seem that outrageous.

Update by Alastair McCaig, Market Analyst, IG Index
10-Mar-15 [12:42pm]

How to Trade on FX Ahead of the UK General Election

In the run up to the election, IG asks Stephen Gallo, from BMO Capital Markets, about what elements to consider when attempting to capitalise on the political uncertainty inspired volatility in the foreign exchange markets.

Despite the ECB also producing its own QE programme, Mr Gallo believes that EUR/GBP will be supported by the ?0.65 level.

Update by IG Index
05-Mar-15 [10:33am] SNP Leads in Scotland

The latest Ashcroft poll puts the SNP well ahead of Labour in Scotland, and this could prove to be crucial for the Scottish nationalists come May as a hung parliament is looking likely.

IG is offering a number of binary bets on the UK general election and they suggest that the Conservatives and Labour will take 288 and 272 seats respectively.

It also indicates the SNP will take 41 seats, which is a 10% increase on the day following the survey conducted by Lord Ashcroft.

Update by David Madden, Market Analyst, IG Index
25-Feb-15 [2:27pm] Is UKIP Starting to Lose Out as We Count Down to the Election?

Whilst the two major parties battle over the latest scandal, this time the 'cash for access' issue and whether MPs should have 2 jobs, neither comes out un-muddied.

Yet what has been interesting about the fallout of these high-profile embarrassments has been the lack of gains made by the smaller parties.

Even just 6 months ago, UKIP would have been able to easily capitalise on this opportunity as the public perception of the dishonesty of the major parties grows.

Yet, they haven't.

Polls Point to Lost Support After Controversial Channel 4 Programme

Lord Ashcroft claims UKIP fell by 5 points to 11% following the Channel 4 mock-doc-drama hybrid programme about the first 100 days of a UKIP government.

A Comres poll for the Daily Mail suggested a similar decline, by 4 points to 13%.

Slightly more recent polls on Tuesday saw slightly different figures, with a YouGov/The Sun poll having UKIP at 14%, whilst a Daily Mirror survey puts them at 19%.

Nevertheless, UKIP are not making their voices heard as much as they were.

The gurning face of Nigel Farage hasn't made the same amount of appearances as before the election campaigns began in earnest, and in the discussions of actual policy the party have remained decidedly quiet.

Farage is Struggling Without a Mainstream Media Backer

However there is a potential alternative reason for this.

UKIP doesn't have any real backing in the mainstream media, at least not in the way the Tories or Labour do, or the Lib Dems did in 2010.

And with the election news being dominated first by the HSBC scandal and now by 'cash for access', UKIP don't have the clout or the history to make their views on these issues sought-after.

For all the talk of this election being a fragmented race between multiple parties, the main battles so far have returned to the usual pairing of Labour and Conservatives.

Spread Bettors Sell UKIP Seats

This has been reflected by UKIP's presence in the spread betting world.

Here at Spreadex, UKIP are the only party to consistently see their odds shrink, now at a General Election Seats spread of 4.5-6.5 from 6.5-8.5 at the start of February.

Their favour with clients has also slowed down; after a flurry of bets on the far-right party when our odds were first announced, there has been very little movement surrounding their hopes in the past fortnight.

In contrast there has been little change at the top, with the Tories at a spread of 280-286, and Labour at 275-281, as the polls remain split on which party will win.

Update by Connor Campbell, Financial Analyst, Spreadex
23-Feb-15 [4:22pm] No Majority Expected for Conservatives or Labour

IG is offering a binary bet on the outcome of the UK general election, and it is indicating that there will be no overall majority and that the Conservatives will take 290 seats.

It also suggests there is a 79% chance of a hung parliament and an 18% chance of a Conservative majority.

Update by David Madden, Market Analyst, IG Index
19-Feb-15 [9:15am]

UK Election Betting Update

Below, a quick look at how Spreadex is pricing up the market.

Note, if you are logging into your Spreadex account, you need to log into 'Sports' rather than 'Financials' to access these prices.

Interesting to see that UKIP are more likely to get an overall majority (100/1) than Nick Clegg's lot (500/1). Having said that, when fixed odds prices get to 100/1 they are pretty spurious to me.

It wouldn't be difficult to find a bookie offering odds of 100/1 or 500/1 for Elvis being found alive.

Realistic Overall Majority?

In a bar the other night I heard some of those clever lads at Goldman Sachs saying support for Labour and UKIP will drop significantly and the Conservatives would get an overall majority.

The market isn't forecasting that though.

For all the negative commentary around Red Ed, the spread on Conservative seats is 280 - 286, only a dash ahead of Labour's 275 - 281 seats.

That's way off the 326 seats needed for a majority.

The fixed odds 'No Overall Majority' is also priced at 1/5, so the current market suggests that we're in for another coalition.

Spread Betting Prices

General Election Seats Spread
Conservative Seats 280 - 286
Labour Seats 275 - 281
SNP Seats 36 - 39
Liberal Democrats Seats 25 - 28
UKIP Seats 5.5 - 7.5

Note: 650 seats available, the Speakers seat and seats in Northern Ireland do not count towards this market.

Binary Election Prices

Most Seats Binary Spread
Conservatives 55.5 - 62
Labour 38.4 - 44.5
UKIP 0 - 1
Liberal Democrats 0 - 0.2

Note: These binary trades make up (close) at 100 if the party is named as having the most seats, otherwise they make up at 0.

Fixed Odds Election Prices

Most Seats Fixed Odds
No Overall Majority 1/5
Labour Majority 14/1
Conservative Majority 9/2
UKIP Majority 100/1
Liberal Democrat Majority 500/1

Overall Majority Fixed Odds
Conservatives 8/13
Labour 5/4
UKIP 100/1
Liberal Democrats 500/1

Update by Jacob Wood, Editor, CleanFinancial
18-Feb-15 [3:13pm] Labour PR Problems Outshine Pledges

The perception surrounding the Two Eds as a pair of bumbling business-illiterates has not been helped this week.

Ed Balls and Shadow Business Secretary Chuka Umunna got embroiled in a discussion over whether you should keep a receipt for every single cash-in-hand transaction regardless of size.

This obscured actual Labour policies like its pledge to create 80,000 high quality internships in industry per year, in the latest move by the party to appeal to a business industry that is incredibly wary of 'Red Ed'.

Labour's Switch to an Economic Focus May be Too Late

However Labour's renewed focus on jobs and the economy, after a misjudged attempt to create an NHS-focused election campaign failed, may be too late.

Today's jobs data saw unemployment fall to a 6 year low, not far above pre-crisis levels.

Importantly, three quarters of the new jobs created were full-time positions.

At the same time, the incumbent Tories are benefiting from falling food and crude oil prices, neither of which is in their jurisdiction.

This has helped them overcome the issue of real wage growth just in time for the election, allowing them to point at falling inflation and say 'look at all this money we are putting in your pocket'.

Sadly for Balls, the electorate don't seem to be paying attention to his warning that the current situation is untenable.

Spread Bettors Keep Buying Conservative Seats

This news has seen the continued, if slowing, trend of buying Tory seats and the selling of Labour in the Spreadex election markets.

This has come despite the fact that the Conservative market has slipped on General Election seats to 280-286 from 281-287, whilst the market for Labour grew to 275-281 from 273-279.

Given the opportunities presented to them, this gap should have been made even narrower by Labour, yet the fact that the Tories only slipped a point says it all.

There was little movement from the smaller parties, as money on UKIP's General Election Seats market began to dry up in the face of actual policy-creation.

Update by Connor Campbell, Financial Analyst, Spreadex

Readers please note:

UK General Election Spread Betting Example

In the run up to the UK's General Election in May, investors can speculate on the number of seats that each of the major parties will win.

For example, looking at a spread betting site like Spreadex, traders can spread bet on the number of seats that the Conservative Party will win.

In this case, they have priced their Conservative Seats market at 280 - 286, i.e. suggesting that the Conservatives will win 280 - 286 seats (short of the 326 needed for a majority).Spread Betting on Political Markets

Therefore, you could spread bet on the Conservatives winning:

  Conservative Seats Trading Example More than 286 seats, or
  Conservative Seats Spread Betting Example Less than 280 seats

When the final result of the 7 May election is known.

Whilst spread betting on the Conservative Seats market you trade in x per seat. Therefore, if you risked 5 per seat and the Conservative Seats market moved by 21 seats then that would alter your P&L by 105. 5 per seat x 21 seats = 105.

UK Election - Conservative Seats Example

Now, if you take the above spread of 280 - 286 and assume:
  • You've completed your analysis of the latest polls and news reports, and
  • You think that the Conservatives are set to win more than 286 seats at the election
Then you may decide that you want to go long of the market at 286 and invest, for the sake of argument, 4 per seat.

This means that you will make a profit of 4 for every seat more than 286 that the Conservatives win. Of course, such a bet also means that you will lose 4 for every seat that the Conservatives get less than 286.

Considering this from another angle, should you buy a spread bet then your profits (or losses) are calculated by taking the difference between the final price of the market and the price you bought the spread at. You then multiply that price difference by the stake.

As a result, if the Conservatives managed to just scrape an overal majority in the election, winning 326 seats, then:

Profit = (Closing Price - Opening Price) x stake
Profit = (326 - 286) x 4 per seat stake
Profit = 40 x 4 per seat stake
Profit = 160.00 profit

Trading on financial or political markets, by spread betting or any other means, is not straightforward. In this example, you had bet that David Cameron's party would win more than 286 seats. Of course, they could disappoint on election night.

If Ed Miliband's Labour Party was able to more effectively persuade the electorate, then the Conservatives might only win 253 seats. If so, you would end up losing this trade.

Loss = (Closing Price - Opening Price) x stake
Loss = (253 - 286) x 4 per seat stake
Loss = -33 x 4 per seat stake
Loss = -132.00 loss

Note: Conservative Seats market accurate as of 19-Feb-15. Other firms may also offer this market.

Trading Risk Warning
'Political Spread Betting' edited by Jacob Wood, updated 18-Mar-15

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