Tuesday, April 03, 2007

I'm up 145% in TS since March 1, but read the fine print

Thanks to NCAA basketball trading, which I found to be quite liquid over the last month, I was able to trade about 20 championship contracts as well as 2 of the 3 final four games. I never took a position greater than 50 of a single contract, and my margin was never over $1,000. But I think I could have traded 10 times the size without any market impact, given the observed flow.

The 145% is an annualized figure that I used since the March 1 TS/Intrade reorganization. The net return on the account, after fees but including unallocated capital, is 14%. I am not very active in TS--NCAA and golf majors comprise the bulk of my activity, although there is always some NFL and MLB mixed in there.

Now if only we could get the same kind of liquidity around some of the Intrade contracts. I have begged them for global warming contracts, as I think they would draw incredible interest, but to no avail (yet).

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