Get set for the biggest night in political betting history. £300million has now been traded on Betfair’s Next President market, beating the all-time record, including sports, by more than 50%. That includes the largest ever single stake – £1m on Biden at 8/15.
Even bigger action is yet to come. In 2016, £75m out of a total £199m was traded after polls had closed. At that stage markets go live ‘in-play’, fluctuating as results emerge state by state, county by county.
Read more: What to look for on election night
Nothing compares to a US election night, due to the way they count and report totals.
CNN has live on-screen scoreboards, with veteran analyst John King breaking down the numbers in each state on their ‘Magic Wall’.
This information is invaluable for the in-play trader and can be found quicker on the specific websites for each state. Results don’t emerge evenly. Some states count the early vote immediately. Others wait. Smaller rural counties tend to announce first, favouring Republicans, before more populous metropolitan areas pile up Democrat votes late.
That unevenness tends to create extraordinary volatility as markets over-react to temporary swings. A candidate might go from 5 per cent up with 30 per cent of precincts reporting, to 5 per cent down once 50 per cent have reported.
This process applies to all US elections – eg for Congress or primaries – and we’ve seen numerous incredible turnarounds over the years. Hillary Clinton once won the New Hampshire Primary from odds of 100/1, for example.
This day didn’t pan out so well for her four years ago, of course. A night of pure betting folklore. As early results appeared to go her way, Clinton’s odds fell to a low of 1/12 and 2/5 to win Florida. Then as now, winning the Sunshine State would mean she was a sure thing and, if not, the Mid-West would clinch it.
The transformation was swift. As I recall from that brain-frying experience, it took about five minutes of improving returns for Trump to become favourite in Florida.
A long count then ensued in the populous, strongly pro-Democrat, Broward County. Just as it became clear those numbers weren’t quite enough, news of trouble in the Mid-West began to surface.
Cue frenetic volatility. At this point, the odds were shifting 5-10 per cent back and forth every minute. Those of us holding a Clinton position were trying to time our exit and many Trump backers were doubtless cashing out earlier huge odds bets. Opportunities for quick, in-and-out, trades appeared constantly, if keeping your head.
There are short windows of opportunity, when the trend becomes apparent, to beat the herd. For roughly ten minutes, Trump traded either side of evens before his odds collapsed in a very short time. The one trade I got right that night was to see the window and halve my loss.
Apart from the obvious – greed and complacency in not cashing out earlier for a big profit – my mistake was to miss Trump’s fantastic numbers in rural counties, where he significantly outperformed Mitt Romney’s share from 2012.
Tonight’s initial plan is to follow a series of counties in Florida, particularly around the 1/4 corridor that famously determines elections in the state, in search of early signals. For example Volusia, Seminole and Osceala. In each, I’ll compare the share to 2016 to see if Trump is moving forwards or backwards.
Perhaps the most interesting county to watch is Sumter, due to its very high number of seniors. Trump won 69-30 in 2016 and will again but if that lead is much diminished, it implies strong evidence of a swing among seniors that likely determines the whole state.
I’ve chosen Florida for several reasons. They will declare quickly. Turnout was already 75 per cent so can only rise so far, as opposed to Texas, where a vast rise in turnout could be complex to read across the state. Plus victory for Biden here would all but end Trump.
If that isn’t clear by the time the West Coast starts reporting, I’ll refocus my attention on Arizona. If Biden has won Florida, the main action will be on his victory of margin in the electoral college. Now that market – involving quick maths, monitoring multiple states at once – is a dream for the sharp trader.
You can follow my live analysis of how the results are breaking down throughout the night on the Betfair Exchange Twitter handle
***Check the world’s biggest political betting market, the Betfair Exchange, for the latest US election odds as we edge towards polling day. 18+ please gamble responsibly***