Thompson is tanking. Why?

It's basically as I described.

It will take a while for Thompson to sink from six to zero as a presidential winner. There are other shorts around that have more potential. Admittedly, I'm taking risker positions now, but as we move into the state-by-state contests there will be more opportunities. Why lock up money in a presidential short that had already dropped by 2/3 and has at least some minor risk of rising back?

Tozikio:

I totally agree with you on this point (except that it's actually fallen by closer to 4/5 from the peak). I would be covering my substantial short position for basically the same reasons if it didn't actually lock up more money for me to do so. (bc of previously mentioned larger short positions on Paul and Giuliani)

Thanks, Tozikio and GAW838.

I've been keeping an eye on the Thompson.Dropout contract, and for several days there was no activity, with the ask price going from 15 to 10 to 9.4 then 9.2, and the bid price has always been 0.1 and 1. This morning someone bought it at 4.0. Someone manages to keep an even closer eye on this contract than I do. Ask & Bid prices have gone right back to what they were before.

Dropouts from 2008 Presidential Race
DROPOUT.DEC07.(F)THOMPSON
Fred Thompson to drop out of 2008 Presidential race on/before 31 Dec 2007 M 1.0 9.2 4.0 0 0

I wouldn't read too much into that. When a contract trades, then naturally a bid/ask was paired, so the spread widens again. Contracts with less than 200 traded, are very thin and the market functions at the whim of a few people.

I have a position in something thin, where I accidentally took the wrong side of it... and it is a major pain to move the price far enough to get any takers on the other side.

Thinly traded contracts are very dicey.

Here's a significant endorsement. Fred's contract is already up 0.6. That is probably the end of his Fredfall. He'll need to rebuild from this point.

http://www.politico.com/blogs/jonathanmartin/1107/Natl_Right_to_Life_to_endorse_Thompson.html

November 12, 2007

Nat'l Right to Life to endorse Thompson
Fred Thompson will pick up the support of the National Right to Life Committee (NRLC) tomorrow, according to two Republicans familar with the decision.
....

Also, there's a big bid for over 800 shares at 6.0, so it looks like the bargain hunters are here.

BID
Qty Price
810 6. 0

Can you say "utterly fractured Evangelical Right" kids? I knew you could...

I hear Mitt Romney is claiming the posthumous endorsement of Joseph Smith, in a hastily-announced response to the Pat Robertson news. There's room for a great Saturday Night Live skit in here somewhere, I'm sure.

http://bp2.blogger.com/_4YYk-vG7Ax8/RzpDggvMzbI/AAAAAAAAAEI/OszQmMEzB5c/s320/drudgereport3.jpg

Why use a Thommy Gun when an H-Bomb is so much more devastating!

NRLC endorsement or not, Thompson=9%, The Huckster=21%!
Game, Set, Match. Fred's out!
Stick a fork in the Fred-falling Thompson campaign - it's done.

Oh, curious about the national numbers? Here ya go!
http://farm3.static.flickr.com/2127/2003339210_27277beedd_o.jpg

According to Polls, Fred Thompson Foundering

http://blog.washingtonpost.com/thefix/2007/11/thompsons_troubles.html

Excerpt...

The American electorate is a fickle mistress. Just ask former Sen. Fred Thompson (R-Tenn.).

Polling numbers are stacking up against former Sen. Fred Thompson.When Thompson announced his candidacy for president just after Labor Day most national polls showed him running a close second behind former New York City Mayor Rudy Giuliani and the majority of state polls had him in the top three.

No longer. Thompson's campaign has yet to take off as expected and voters -- especially in crucial early states like Iowa, New Hampshire and Florida.

The most recent data comes from New Hampshire where two surveys were released over the weekend. The first, conducted by theUniversity of New Hampshire for the Boston Globe, put Thompson in sixth (yes, SIXTH) place with just three percent of the vote.

.... Excerpt

Thompson has a sick looking trend on Pollster
for New Hampshire. It's as if all the public only
needed a short look, and they gave up on him.

I think Huckabee and Paul are taking support
from Fred. These are the people who are looking
for "something or someone else" -- they thought
they'd find it in Thompson, and didn't.

Tozikio wrote:

I think Huckabee and Paul are taking support
from Fred. These are the people who are looking
for "something or someone else" -- they thought
they'd find it in Thompson, and didn't.

On the ideology scale, Hunter is closer than Huckabee or Paul. That is only New Hampshire polling data, and that state has its own strange political mixture. There's a thread right here at Intrade discussing Hunter and the possibility of gaining traction.

https://bb.intrade.com/intradeForum/posts/list/1797.page

He's polling at 3-4%, which is a bump up from what Delphi called Asteriskville. I would expect to see some liquidity in the Hunter contracts coming up pretty soon.

You're right in an objective sense. But I think in the
early stages of the primary, the voters themselves
don't know what they want. Thompson had created
a chameleon-like reputation before entering the race.
He could be anything to anybody since it wasn't
clear how he would campaign.

Independent leaning Republicans had already
decided against the early announced and best
funded candidates. The fall of McCain was known even
before Thompson entered. It was assumed that Thompson
could vacuum up all the dissatisfied voters.

In a nutshell, Thompson had the "support" of the soft,
window shopping voters back in early September. People
are making up their minds now and drifting elsewhere.

I also agree that New Hampshire is a quirky place. But
Thompson needs to show some reasonable mass appeal.
If he gets single digits there, it could affect his results in
South Carolina.

Here's an article I wrote on Free Republic, got quite a bit of play.

(vanity) Why the smart money is on Duncan Hunter
Self ^ | 11/11/07 | Kevmo
http://www.freerepublic.com/focus/f-news/1926032/posts?page=1,250

Posted on 11/15/2007 3:43:17 AM PST by Kevmo

OK, so you’ve got a thousand dollars burning a hole in your pocket and you want to make a statement with it at the same time as getting 40X return on your “investment”, you want $40,000 for that $1000 bet, like Hillary did in her Pig Belly futures or whatever it was. You’re going to decide between putting it down on Hunter or Thompson over at Intrade because these are the 2 most conservative candidates in the race.
https://www.intrade.com/
Which one do you choose?

Let’s start with the guy who has 3 balls. He’s got courage in spades. He’s engaged enemy soldiers in Viet Nam when he was a LRRP ranger and he got a Bronze Star for his real bravery. His friend and supporter also has 3 balls, the guy who we all know as “the man who broke the sound barrier”, Chuck Yeager. While they’re campaigning in Iowa, all you have to do is ask Chuck to tell the story about how he and Bob Hoover were in Russia and got that chance to fly a YAK and Bob took it up gently and respectfully and flew it straight & level into the horizon… and then returned over the viewing stand flying upside down and basically causing the Russians to pee in their pants. After hearing this story or one of a million others, Hunter will take the podium and leverage that emotional courage language that Americans love, and they’ll all look at each other & nod, saying, “this is the guy who should be my president”.

Now let’s cover the guy who played a soldier in the movies. He was quite convincing when he was telling Jack Ryan of the CIA that he wouldn’t be able to get to the submarine because it involved flying in a helicopter, and the last time Jack was in a helicopter he spent 3 months recovering from the accident. It’s interesting and fun entertainment, but it is not real. While he and his friend are campaigning in Iowa, he will need to build his own emotional leverage with the audience, and this is not a Hollywood script.

Right now over at Intrade, Thompson futures contracts are trading at about 6%. There was a time when he had the lead and was trading at 35%, but over the last few weeks he has lost about 30 points. He had the spotlight shining on him as the most conservative guy with the best name recognition, while thousands of his supporters were crossing their fingers during the debates hoping he wouldn’t screw up.
https://www.intrade.com/jsp/intrade/contractSearch/

Hunter futures contracts are at 0.1%. Over the last few weeks they have remained at 0.1%, with the volume staying put at 27778. That is the number to watch. All it takes is for that number to start moving. It means someone is buying Hunter’s contract at a very low price. Within a few weeks, that number will be history. Hunter has been campaigning on a shoestring budget and slowly gaining recognition in the polls, recently just coming in at 4%.
http://www.angus-reid.com/polls/view/28889/republicans_2008_giuliani_28_thompson_19

All he needs is one more percent. Hunter needs to get to 5% in the coming weeks in order to be invited to the Iowa debate by our friends at the Iowa GOP.
http://www.freerepublic.com/focus/f-news/1922644/posts
At that point, everyone will know he’s at 5% in the polls. His futures contracts at Intrade, if they’re still at 0.1, will have relentless upward pressure from bargain hunters, but by then it will be too late to buy in at that price.

Here’s where the decision gets made, why the smart money is on Duncan Hunter rather than Thompson. In order to get 40X return by investing in Thompson, you would have to buy his contract to win the whole kit & caboodle, the presidency, which is now trading at 2.5.

2008.PRES.THOMPSON(F)
Fred Thompson to win 2008 US Presidential Election

At $6, you could not get 40X return on the Fred.Nominee contract. If you bought it at $5, the best you could get is 20X return.

2008.GOP.NOM.THOMPSON(F)
Fred Thompson to be the Republican Presidential Nominee in 2008

The forum at Intrade seems to waver between those who think Fred’s campaign is imploding and those who think it will rebound. But they have freewheeling discussions about the why and how that we have been missing here on Free Republic.
https://bb.intrade.com/intradeForum/posts/list/1805.page

So your decision comes down to this: Is it more likely that Hunter will get 1% more exposure in national polls, and move up to 4 or 5% at Intrade or is it more likely that Thompson will win the presidency outright? Remember, this is the guy who had the spotlight shined on him as the conservative golden boy and lost 30 points at Intrade, and has been losing ground in the polls lately.

While his supporters are crossing their fingers hoping he doesn’t screw up, Hunter’s supporters are folding their hands in prayer hoping that he’ll just be himself.

Over the last few days, I’ve seen a couple of posts like this
http://www.freerepublic.com/focus/f-news/1925179/posts?page=284#284

According to Polls, Fred Thompson Foundering
Posted by Kevmo to SergeiRachmaninov On News/Activism 11/13/2007 1:51:29 PM PST · 284 of 536
It is a bitter time for those who have invested all their hopes with Fred and repressed all doubts. ...Still it is not much fun when you have chosen your candidate, put him on a pedestal, and gone to war for him, and then reality starts to batter you. I’ve already trod the path from hopeful about Fred, to disappointed, to angry in my disappointment. I really should do better at being gentle to those who are somewhere else along on that path.
***That is some amazing candor. I honestly do think that Hunter will not disappoint you in that way. He may not win the nomination due to lack of name recognition, but he is doing what he can about that. His character stands head & shoulders above the others in the race.

That is the emotional language of someone who has felt betrayed by his candidate. But the Hunter followers do not feel betrayed, they have circled the wagons and they are coming out fighting. That’s where you put your money down, where there is fight to the inner core, and the guy they’re fighting for is genuine.

All it takes is that one or two Freepers will copy this article and send it to their wealthy friend who did so well in the stock market during the dotcom boom, or won a thousand bucks at a beer drinking tournament or whatever. Then we’ll start to see that 27778 number trickle, then it will flood through relentlessly. And that will serve as a metaphor for the entire republican campaign, what has been a trickle of support will soon break through the floodgates in myriads of ways, whether it’s our grandmother sending in the $25 check to Hunter’s campaign
http://www.gohunter08.com
or Iowans asking if they could put up a sign on their front lawn or our grandchild folding her hands in prayer for this courageous man.

And then we’ll see Hunter smile.

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It’s a wide open race, might as well back the most conservative man.
According to Polls, Fred Thompson Foundering http://www.freerepublic.com/focus/f-news/1925179/posts

Here’s what I’ve been posting lately.

Here’s a recent poll showing Hunter at 4%.

http://www.angus-reid.com/polls/view/28889/republicans_2008_giuliani_28_thompson_19

Here’s an intrade link to the forum site discussing how Hunter might be gaining traction. http://bb.intrade.com/intradeForum/posts/list/1797.page

Here’s an intrade link to the forum site discussing how Fred is at $6, which corresponds to the traders believing he has a 6% chance of winning the nomination, and discussing why. http://bb.intrade.com/intradeForum/posts/list/1805.page

One thing prediction markets are better at — their only bias is whether someone can make money trading the futures contracts.

The Efficacy Of Prediction Markets The Liberty Papers ^ | November 8, 2007 | Brad Warbiany http://www.freerepublic.com/focus/f-news/1922961/posts

Posted on 11/08/2007 12:21:43 PM PST by E. Pluribus Unum

Fred has lost ~30 points at Intrade over the last few weeks, looks like it’s stabilizing at ~6%.

Thompson Tanking in Futures Markets (Intrade, IEM) Intrade; Iowa Electronic Markets ^ | October 31, 2008

http://www.freerepublic.com/focus/f-news/1919127/posts

The Dropout contract for Thompson has an ask price 2 points higher than last trade. There is no Dropout contract for Hunter.

http://www.intrade.com/jsp/intrade/contractSearch/

DROPOUT.DEC07.(F)THOMPSON Fred Thompson to drop out of 2008 Presidential race on/before 31 Dec 2007 M 6.0 9.2 4.0 0 0

1 posted on 11/15/2007 3:43:18 AM PST by Kevmo

Hunter's contracts have started to move, now the ask price is doubled.

2008.GOP.NOM.HUNTER
Duncan Hunter to be the Republican Presidential Nominee in 2008 M 0.1 0.2 0.1 28778 0

This exchange was posted on the Duncan Hunter thread.

ko

Intrade

Joined: 03/11/2007 19:01:54
Messages: 36
Online

CaliforniaArchitect wrote:

It seems like there is a loadup on the Ask side. The last time I looked at the contract there weren't that many contracts up for the asking.

I agree, but I don't know what it means. The last time I checked, there was only ONE ask price, of 0.1 and NO bid prices. As a Hunter supporter, I consider this to be significant! But someone will probably be along shortly to straighten us out.

CaliforniaArchitect wrote:

The followup question now would be, how long is the Hunter contract a bargain? If you think the target trade price is $4, then it wouldn't be really worth the risk at buying in at $3.50.

That's a good question. Of course, for me, I would consider it a bargain at $50, but everyone knows that there's an exaggerated emotional component to that suggestion, and there are traders here who would LOVE to deal with me, hah hah.

Here's how I would look at it. The price someone is willing to pay for a futures contract would have maybe 5 elements: Current Poll Support + Financial Support + Followers' Energeticism + Media Buzz + Campaign Ability. Let's use the respective Acronyms CPS + FS +FE + MB +CA. I'm sure there are more. When you look at Ron Paul, his CFS was ~3%(???notsure); FS was low then in one day, high -- and notably here on Intrade that was treated with a yawn; FE is very high; MB was kind of high for such a low polling candidate; CA was probably high, though I was not following his campaign. All that translated into a trading price in the 9's, and Delphi felt compelled to ask why. Huckabee's CPS was kind of low; his FS was medium; FE was medium; MB was Medium; CA was pretty high, he's an engaging speaker and campaigner. That translated into an Intrade value that was higher than the poll numbers at the time, if I recall correctly. Here's where I see Hunter: CPS low; FS low; FE very high; MB very low; CA about medium. It all translates into a completely stagnant Inprice value, which looks like it is in the midst of changing upward.

Going on poll results is not based upon a presumption any more than one would presume that 5 cards dealt in a poker game have the same odds as 5 cards dealt to someone else. Hunter would need to go from 4% to 5%. What are those chances? I would put them at about 2 to 1. So I would be taking a 2-to-1 bet to gain a 40-to-1 contract. That’s a great bargain. It’s like poker, when the pot odds are way above your hand odds.

When Hunter gets to 0.2, the pot odds go to 20-to-1 payout, and at 0.4 it's 10-to-1, at $3 it's 3-to-4 payout. The RATIONAL approach is to gauge what you think are his chances of Intrade meeting the poll support against the current "pot odds". But the irrational approach is when I'm a Hunter supporter, I see his chances of getting to 5% in the polls and being invited to the Iowa debate as less than 1-to-1, maybe 1-to-1.5. That means I consider a $4 price to still be a bargain, and there are plenty of Intraders out there who probably think it would be a good time to sell. That's the beauty of the market. Eventually the folks who think a $10 price for Hunter when he's polling 5% ( basically 1-to-2 emotional hand odds) are very few, and they buy only a few contracts and the price tends to stabilize around an agreed median between the two camps.

For me personally, I think Hunter's chances of getting to 5% in the polls are about 1-to-1.2 (20% likelihood of not happening) and that gets weighed against the current price and what I'm willing to pay, which unfortunately is not that much because I am losing my job

and money is extremely tight in our household as Christmas approaches and I have to find ways to make the kids happy.

The interesting thing about the elements CPS + FS +FE + MB +CA is that they are constantly dynamic. When we see someone trading above their polling numbers like Ron Paul was, it's an indicator that the other elements are high, and when we see them trading below the polling numbers the reverse is true. In Thompson's case it is a blinking red light because he has plenty of money, media buzz (he's a hollywood pro), FE seems about medium or high. That means his CA score is Very Low, or there is some other element in my goofy equation that is bringing down his score here at Intrade.