Arbitrage on US election prediction markets to raise money for charity

Because politics is a mindkiller, there is a pretty big arbitrage opportunity in the US election prediction markets that I found recently.  It makes a ~11% return on your investment in two days, regardless of who wins the election.

Why don’t we put some money on this and donate the proceeds to the most cost-effective charities?  I’ve already done this and I’ll be donating $100s regardless of who wins.

How does it work?  Intrade has Romney at ~32.6% at the moment.  Betfair has Romney at ~21.3%.  This difference allows us to perform arbitrage.  See here for how it works:  <a href=”http://en try this”> I’ve been monitoring the prediction markets and this opportunity has existed for several days now, and doesn’t seem to be going anywhere.

Basically, sell/short Romney here:

And buy/back Romney here:

Just match the amount you put on Romney at Betfair to cover any potential losses that you could make at Intrade, taking into account the 5% commission that Betfair takes on your winnings.  Intrade don’t charge commission, but do charge a £5 per month at the start of each month so just close your account by the end of this month.

It’s currently a ~11% ROI in 2 days, and I’ve already put a decent amount of money on this so if you have any questions just let me know.
As with anything involving large sums of money, don’t do this unless you know what you’re doing.  The last thing you want to do is to lose all your money by getting a couple sums wrong!  In particular, read about the potential problems.

This opportunity will only be available until the US election, so if you want in, you’ll need to get in quick.  Let me know if you have any questions, and if you do take up the opportunity as I’d love to monitor how much of an impact one can have through opportunities like this.

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