Trading news flow
The importance of liquidity
One of the most important aspects of a successful trading market is liquidity. You can enter any market at any price, but sometimes you will want to get out quickly as well. That is why liquidity is important when trading, it gives you control over your position.
Sometimes you can find liquidity markets in the most unusual places, hunting them has become something I enjoy doing. We’re less than a week away from the Scottish vote on independence. Once something is in the public eye, the first thing I do is head over to Betfair to see if there is a market on it! There is already nearly £7m traded on the Scottish independence vote, and it was a busy market from the off, so that caught my attention.
Relatively speaking, it’s easy to price some markets. I can tell you easily if something is value on Tennis or Football, less so on racing. On the Scottish independence market there are no variables or indicators, it’s driven purely on opinion. There is no right price before the votes are counted.
How news has moved the market
We can already see how news flow has affected this market. A ‘No’ vote was expected to win comfortably early on but, as the ‘Yes’ campaign appealed to the romantic hearts of voters, putting aside the practical realities of independence, the ‘No’ vote weakened. Seeing this, the ‘No’ campaigners fired their first salvo, they threw some stark realities into the mix. This sent the ‘No’ market rocketing back in. This was helped by the first TV debate which Alastair Darling won for ‘No’ vote campaign.
Then we had the feel good factor of the Commonwealth Games in Glasgow which gave the ‘Yes’ vote a short-lived fillip. Active campaigning by the ‘Yes’ camp, however, seeking to distract voters from the complicated issues surrounding separation saw them gaining, in theory at least, and ‘No’ weakened again. This was given added momentum by a fiery second TV debate.
It wasn’t long though before a cold bucket of water was needed to bring the ‘No’ vote back in to the lead. A series of statements from key companies stating that the uncertain path of independence would mean problems, brought the market back in again. The ‘Yes’ campaign’s complaint that ‘it’s scaremongering’ are weakening with every announcement.
Will there be more movement in this market? I expect so. As the rhetoric ramps up in the final week, more polls, views, opinion, political posturing and mudslinging will no doubt play its part. News flow will reach fever pitch in the final days. There is a thread running on the Bet Angel forum which our users are bouncing ideas and opinions on. It’s a useful way to track the progress of the market.
While a lot of people are turned off by politics, the constant posturing and behind the scenes activity can make for great trading opportunities. Especially during the run up to the vote on Scottish independence.
Category: Alternative markets, Trading strategies
