2009.GLOBALTEMP.TOP5 Aug-Dec, Sep-Dec and now Oct-Dec Graph

I'm assuming the contract expires at 100 if this year ties for 5th place? Or should that not be assumed?

64spush wrote:

I'm assuming the contract expires at 100 if this year ties for 5th place? Or should that not be assumed?

How do you define ties? The same number in the J-D could occur rather more easily occur than if the sum of the Jan to Dec columns adding up to the same figure. I tend to assume the placing to be used in the annual summary report will be based on the sum of the Jan to Dec columns rather than the J-D column but I could easily be wrong. I also don't think it will be that close but you never know.

I was thinking it would be ranked based on the average published to 2 significant digits, ie, the J-D number.

It would be good to know exactly what they will be expiring based on. If you hear anything official please let me know.

this has got to be one of the more complicated markets on intrade.
Let me get this right - it's on a knife edge at the moment, probably 5th but perhaps 6th. So it seems as if it's a bit overvalued, no? Should we not be looking at around 50?

I'd say coming 4th is more likely than 6th at this point. I'd love to have additional markets for the exact placement of this year, instead of just top 5.

it's on a knife edge at the moment

wtf?? 6 out of the last 6 months are at a rate higher than the current required rate and that is before ENSO effects which are still predicted to get stronger and last though northern hemisphere winter.

64spush wrote:

I'd say coming 4th is more likely than 6th at this point. I'd love to have additional markets for the exact placement of this year, instead of just top 5.

I would like that too, though I would settle for just one more contract on 2009 - top2 position provided they would get two or 3 contracts going for 2010.

wtf wtf yourself. Apologies if we're not all meteorologists on here.

5th place isn't terribly likely and 7th place is more likely than 6th place even though current average would indicate we are in 6th place at present

Forget this.

Comradem, sorry if my post wasn't clear. If you read the whole thing you should see that I was having a go at MC_Pundit

Chris57 wrote:

MC_Pundit wrote:

Nevertheless, my analysis of these data also led me to the conclusion that this year is considerably more likely to come in at #5 than at #6. I'm not sure why there continue to be lots of sellers around 50. Do they have more information than is contatined in the data on that page, or are they valuing the contract based on less info?

Of course, if you want to play games like that: 5th place isn't terribly likely and 7th place is more likely than 6th place even though current average would indicate we are in 6th place at present ......

What does that say about the probability of 5th place or higher against probability of 6th place or lower?

MC_Pundit said "considerably more likely to come in at #5 than at #6" and I was having a go at him for posting misleading information. 6th is a smaller place gap than 5th so it is less likely and this says nothing about probability of 5th or higher versus 6th or lower. 7th is a much bigger gap again and I am doing the same and making the point that it says nothing about 5th or higher versus 6th or lower.

Looking through my posts I have consistently been saying the price should be higher.

FWIW we are already up to 4th place, there is an upward trend as expected due to strengthening El Nino and I think 2nd place is most likely. I think the price of this contract should be up somewhere near 95.

I'd be willing to trade against you in the TOP2 market. Intrade doesn't seem to be listening to my contract suggestions any more...

Chris57 wrote:

FWIW we are already up to 4th place, there is an upward trend as expected due to strengthening El Nino and I think 2nd place is most likely. I think the price of this contract should be up somewhere near 95.

Sorry just reread my last paragraph. I meant the price of this top5 contract should be near 95 and 2nd place is more likely than any one of 3rd, 4th, 5th, 6th, 7th etc

So what prices would I expect them to trade at?

Lets see
Rank Year Sum Average
1 2005 750 62.5
2 1998 679 56.58333333
3 2007 678 56.5
4 2002 669 55.75
5 2003 655 54.58333333
6 2006 648 54
7 2004 582 48.5

So rank and temperature ranges (assuming based on using sum/average of Jan to Dec columns) are:

Rank, Range, Size of range
2nd 680-749 70
2nd= 679 1
3rd - -
3rd= 678 1
4th 670-677 8
4th= 669 1
5th 656-668 13
5th= 655 1
6th 649-654 6
6th= 648 1
7th 583-647 65

My est of sensible price ranges for 2nd place based on using average of Jan to Dec columns would be

2nd 50 to 90
2nd= less than 1
3rd less than 1
3rd= less than 1
4th 6 to 11
4th= less than 1
5th 6 to 11
5th= less than 1
6th 1.5 to 3
6th= less than 1
7th 3 to 7

that adds up to a range of 66.5 to 128

Please note that is what I think is sensible - that doesn't mean I would trade outside that range unless I have managed to sell off some of my long positions.

Yes I realized you were referring to the TOP5 contract when you mentioned the 95% price.

I still think we would be able to make some trades on a TOP2 or TOP3 contract, assuming you'd have margin available.

At least the 2010 top5 contract is up

Don't like to get involved in contracts that take > 1-2 months to expire. I would have traded in the Top2 or Top3 2009 contracts, it's a shame intrade doesn't listen to suggestions that would bring in a bit of volume.

64spush wrote:

Don't like to get involved in contracts that take > 1-2 months to expire.

Interest rates over 3 months are pretty tiny so you don't need much of a misprice to make a decent rate of return. However, when you go to 2 and 3 years you do have to find a serious misprice to make it worth trading and that remain true even if it were possible to bet with shares or other investment that yielded a descent rate of return. So in the case of Top5.2013 and 2014 I have to agree with the sentiment of 'don't like to get involved'.

OTOH: 1. I don't see any harm in having them there listed ready for when people decide they do want to get involved.

2. I think your 1-2 months is too short and unnecessarily restrictive - but hey, it is your choice and I wouldn't want a world where we are all the same.

64spush wrote:

I would have traded in the Top2 or Top3 2009 contracts, it's a shame intrade doesn't listen to suggestions that would bring in a bit of volume.

I would doubt that these are that interesting when there is 2 months or less to go. However I would have no problem with them being available just in case they brought more people to the globaltemp contracts and, FWIW, I would find them interesting with 4 to 12 months to go.