Great Scots!

(I could really use some whiskey for this post)

So, the U.K.’s political/financial leadership — and their journalist microphones — are getting downright apocalyptic about the possible consequences of Scottish independence.

That alone would be enough to get me out voting “yes”, were I a resident of Scotland. Alas, I am not. But I do know the only poll I need to follow:

Betfair Scottish independence contract

It is not quite as easy to read as TradeSports (RIP), in part because you have to translate “Back” and “Lay” from English to English. Roughly, “back” means “bet for” and “lay” means “bet against”. The number represents gross winnings versus a “back” bet of $1. (Technically it’s £ not $ and occurs in multiples of 10. But (a) I am from the colonies and (b) the units are irrelevant.)

For example, as I write, the “yes” contract is trading at 4.6/4.7. That means you can hand over $1 and get back $4.60 if Scotland votes for independence, or you can hand over $3.70 and get back $4.70 if Scotland votes against independence.

Bottom line: To convert Betfair lines to probabilities, just take reciprocals. So 4.6/4.7 corresponds to a probability between 21.3% (1/4.7) and 21.7% (1/4.6). That is higher than I would estimate, personally. Anyway “too close to call” is a bit generous.

Just like TradeSports, the nice thing about this market is that it reflects new information very quickly. This particular contract was trading around 3.0 a week ago.

Other contracts of mild interest:

2014 Senate control (Republicans currently at 1.5 = 67%; usually agrees with FiveThirtyEight)
2016 Democratic nominee (currently Clinton 67%)
2016 Presidential election (currently Clinton 40%; I myself would estimate these last two to be equal and higher)

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