TAVIA GRANT
Globe and Mail Update
Hurricane season officially began last Thursday and with it, wagering on the likelihood of storms hitting the U.S. coast.
A Dublin-based futures exchange is giving roughly 50/50 odds that a Category 3 or greater hurricane will hit Florida before the end of November. (Katrina hit land as a Category 4.) It gives far less chance of big storms hitting Louisiana, Texas or Georgia.
This is the fourth year that intrade.com has offered futures trading on the weather, but it may garner particular attention this year after the most costly U.S. hurricanes in history last season. Because the weather can play such havoc on oil and natural gas prices, everyone, it seems, is becoming an amateur meteorologist these days.
“Weather is huge business and everybody is interested,” said John Delaney, founder and chief executive officer of the Trade Exchange Network, which runs the intrade.com website, among others, in a telephone interview from Dublin.
Hurricanes, of course, are not the only gambling opportunity on his site, which has hundreds of different contracts on offer.
Bookies are currently taking bets on when bird flu will hit the United States, by how much the U.S. Federal Reserve Board will raise interest rates and whether U.S. Defence Secretary Donald Rumsfeld will resign. That's not to mention World Cup wagering, which is currently fancying Brazil to win.
Mr. Delaney said most of the bettors on his site are from the United States, followed by Canadians. He began his company four years ago and now has 64,000 registered members.
People make or lose money by betting that certain events will or will not happen. If, for instance, you reckon that the odds of a Category 3 Florida storm are greater than 50 per cent, then you buy a contract. If those odds go up as the season progresses, you will earn the difference between what you bought the contract at and the new odds. If you're wrong and no storm occurs, you will lose the value of what you paid.
While piling all your cash into on-line gambling is not to be recommended, this type of betting has a record of accurately predicting future events.
Last month, futures traders correctly predicted that former Enron executives Kenneth Lay and Jeffrey Skilling would be convicted.
They also accurately predicted earlier this year that the Conservatives would win the federal election.
Placing money on a bet — rather than simply answering a poll question — tends to give more accurate outcomes because people look at the likelihood of something happening, rather than what they want to happen, Mr. Delaney said.
Betting “increases the amount of effort that you're going to put into making your prediction,” he said. “When you ask people a question and say, ‘If you get this right, you're going to win an award,' a lot of people are motivated, by money and reward.”
Right now, odds favour — ever so slightly — that a woman will become the next president of the United States.
Bettors are predicting a Democratic victory in the 2008 U.S. elections, with Hillary Clinton seen as the most likely nominee.
Mr. Delaney said the heaviest volume in trading right now is in World Cup futures contracts, and specifically whether the United States has any chance of winning (priced at about a 1-per-cent chance).
Brazil is currently the top pick, with a 26-per-cent chance, followed by England, Germany, Argentina and Italy.
Tote boards on other sporting websites are also giving good odds for Brazil.
If you feel the need to base your World Cup wager on the same sort of heavy-duty research you apply to investing, then giant Swiss investment bank UBS Securities has a tip for you.
Using econometric modelling and statistics, financial analysts at the firm have concluded that Italy has a reasonable chance of beating both the odds and defending champion Brazil to take the Cup — although Andreas Hoefert, global investment recommendations deputy, confessed to CBC Radio's The Inside Track on Sunday that his secret hope is that Switzerland will sneak through with a victory.
Globe and Mail Update
Hurricane season officially began last Thursday and with it, wagering on the likelihood of storms hitting the U.S. coast.
A Dublin-based futures exchange is giving roughly 50/50 odds that a Category 3 or greater hurricane will hit Florida before the end of November. (Katrina hit land as a Category 4.) It gives far less chance of big storms hitting Louisiana, Texas or Georgia.
This is the fourth year that intrade.com has offered futures trading on the weather, but it may garner particular attention this year after the most costly U.S. hurricanes in history last season. Because the weather can play such havoc on oil and natural gas prices, everyone, it seems, is becoming an amateur meteorologist these days.
“Weather is huge business and everybody is interested,” said John Delaney, founder and chief executive officer of the Trade Exchange Network, which runs the intrade.com website, among others, in a telephone interview from Dublin.
Hurricanes, of course, are not the only gambling opportunity on his site, which has hundreds of different contracts on offer.
Bookies are currently taking bets on when bird flu will hit the United States, by how much the U.S. Federal Reserve Board will raise interest rates and whether U.S. Defence Secretary Donald Rumsfeld will resign. That's not to mention World Cup wagering, which is currently fancying Brazil to win.
Mr. Delaney said most of the bettors on his site are from the United States, followed by Canadians. He began his company four years ago and now has 64,000 registered members.
People make or lose money by betting that certain events will or will not happen. If, for instance, you reckon that the odds of a Category 3 Florida storm are greater than 50 per cent, then you buy a contract. If those odds go up as the season progresses, you will earn the difference between what you bought the contract at and the new odds. If you're wrong and no storm occurs, you will lose the value of what you paid.
While piling all your cash into on-line gambling is not to be recommended, this type of betting has a record of accurately predicting future events.
Last month, futures traders correctly predicted that former Enron executives Kenneth Lay and Jeffrey Skilling would be convicted.
They also accurately predicted earlier this year that the Conservatives would win the federal election.
Placing money on a bet — rather than simply answering a poll question — tends to give more accurate outcomes because people look at the likelihood of something happening, rather than what they want to happen, Mr. Delaney said.
Betting “increases the amount of effort that you're going to put into making your prediction,” he said. “When you ask people a question and say, ‘If you get this right, you're going to win an award,' a lot of people are motivated, by money and reward.”
Right now, odds favour — ever so slightly — that a woman will become the next president of the United States.
Bettors are predicting a Democratic victory in the 2008 U.S. elections, with Hillary Clinton seen as the most likely nominee.
Mr. Delaney said the heaviest volume in trading right now is in World Cup futures contracts, and specifically whether the United States has any chance of winning (priced at about a 1-per-cent chance).
Brazil is currently the top pick, with a 26-per-cent chance, followed by England, Germany, Argentina and Italy.
Tote boards on other sporting websites are also giving good odds for Brazil.
If you feel the need to base your World Cup wager on the same sort of heavy-duty research you apply to investing, then giant Swiss investment bank UBS Securities has a tip for you.
Using econometric modelling and statistics, financial analysts at the firm have concluded that Italy has a reasonable chance of beating both the odds and defending champion Brazil to take the Cup — although Andreas Hoefert, global investment recommendations deputy, confessed to CBC Radio's The Inside Track on Sunday that his secret hope is that Switzerland will sneak through with a victory.
