- Our Labour seats spread betting market was 148 - 152 on 5 May when the Labour party took a hammering at the local elections
- The Labour party market is now 50 seats higher at 199 - 203 seats
- Jeremy Corbyn has gone old school by promising the earth and the electorate are buying it
- At the same time, we have seen some aggressive bets against Labour
- One client has shorted Labour for £500 per seat, i.e. they win/lose £500 for every Labour seat
- With the risk of a hung parliament, Theresa May's election gamble looks like the more risky bet
- Charts below show the swing in the betting market from Conservative to Labour
Labour Party bounce but with aggressive bets against them
Since the Labour Party's local election disaster there has been a big 50 seat swing towards Labour in the spread betting market.
The Labour seats market was 148 - 152 on 5 May when the Labour party was taking a hammering at the local elections.
Jeremy Corbyn has gone old school by promising the earth and the electorate are buying it.
The Labour seats market is now at 199 - 203 seats.
The Labour Party leader is doing well by invigorating the more youthful end of the spectrum, a segment that politicians of all hues have ignored for years.
It looks like there have been a notable number of new younger voters and they are more likely to favour Labour [1].
Theresa May is having a shocker
The Prime Minister has been getting in a pickle over her U-turn on social care/death tax.
She's also commented positively on issues such as fox hunting, a 'sport' that is repellent for many except for a small section of the population who would vote Conservative anyway.
Ducking the latest "Leaders TV Debate" helps her critics attack her.
What is the Prime Minister selling? So far her USP is that she can be a "bloody difficult woman" if she wants to be.
Theresa May is offering pragmatism but Jeremy Corbyn is selling hope.
As Emmanuel Macron, Donald Trump and Barack Obama know, the electorate buys "hope", they buy "change".
As a result, the Conservative seats market has crumbled from a high of 401 - 405 on 5 May to the current price of 363 - 367 seats.
The polls and spread betting markets
The spread betting market is broadly tracking the polls. That is easier said than done when the polls have been quiet varied, depending upon how the polls weight "likelihood of voting" vs. "age".
Our markets might be becoming a proxy for how interested younger voters are in politics.
We've also seen some big trades against the Labour Party.
One client has sold the Labour Party market at 175 seats for £500 per seat.
I.e. the client will lose £500 for every seat that Labour gets above 175, e.g. if Labour get 180 seats that's a loss = (180 - 175) x £500 = £2,500 loss.
Likewise, the client will make a profit of £500 for every seat less than 175 that Labour win, e.g. if Labour only get 171 seats that's a profit = (175 - 171) x £500 = £2,000 profit.
That is a big bet.
Nevertheless, with the risk of a hung parliament, Theresa May's election gamble looks like the more risky bet.
Chart Showing the Rise in the Labour Party Seats Market
Chart Showing the Fall in the Conservative Party Seats Market
UK Election Spread Betting Markets: Screenshot
Above, FinancialSpreads.com prices as of 12:30pm, 1 June 2017.
Disclaimer: Spread betting, CFDs and margined forex trading are leveraged products which carry a high level of risk to your capital. You can lose more than your initial deposit so you should ensure spread betting, CFDs and margined forex meet your investment objectives and, if necessary, seek independent advice.