Brexit Odds: Beware the Bookmaker Marketing Gimmick | Vantage FX

Brexit Odds: Beware the Bookmaker Marketing Gimmick

June 15, 2016

Image: Ostaleri Flikr (cc)


If you trust some of the polls, you’d see that the leave campaign has hit the lead. But what do the markets say?

Let’s just taper (I love that I got to use this word again!) our expectations a little bit here. In terms of what markets are saying, the leave campaign has NOT gained the upper hand by any stretch. Just look at the following price/volume over time charts, as well as the last price matched from the betting exchange Betfair:


Betfair Price/Volume over time chart (stay) on the Brexit referendum


Betfair Price/Volume over time chart (leave) on the Brexit referendum

I really love these betting exchange charts rather than say a GBP/USD chart because betting markets don’t try to price future event risk into themselves like a currency market will.

Last night I tweeted this same Betfair price/volume over time chart and highlighted that most recent price spike which was caused by the following headline quote picked up by mainstream media from William Hill media relations director, Graham Sharpe:

“The momentum is such that it seems inevitable Brexit will be favourite by the weekend if this trend continues.”

Now let me take my trader cap off and put my marketing professional cap on for a second. Ask yourself what would have been asked in the William Hill weekly marketing meeting heading into Brexit? It would have been quite simply, how can we get the biggest bang for our buck. What would make people sit up and take notice?

You think people want to read headlines that say ‘bookmaker sets Brexit odds sensibly’? Of course not! The people want to hear about the roughie. They want to feel like the punters are starting to gain the upper hand. Of course the bookies are going to be telling us how much money they’re taking on the rank outsider.

I can’t believe that it got picked up by legitimate news services to be honest. Well played William Hill… Well played.

Chart of the Day:
The EUR/GBP chart is sitting at a really interesting and most importantly tradable level right now which I wanted to highlight over the following two charts.

EUR/GBP Weekly:
EUR/GBP Brexit forex chart: W1
Click on chart to see a larger view.

First up on the higher time frame weekly chart, we can see the following horizontal level with the obvious rejection.

EUR/GBP 4 Hour:
EUR/GBP Brexit forex chart: H4
Click on chart to see a larger view.

Zooming into the lower time frame 4 hour chart and you can see the level in question has been in play intra-day over the last few weeks and is back buzzing around the level right now.

With the risks of trading into the Brexit vote really starting to get real, there is no way I’m advocating using this level for any sort of long term swing trade, but it’s certainly a level that’s in play and can be actioned in your trading.


On the Calendar Wednesday:
GBP Average Earnings Index 3m/y
GBP Claimant Count Change

CAD Manufacturing Sales m/m
USD Crude Oil Inventories

USD FOMC Economic Projections
USD FOMC Statement
USD Federal Funds Rate
USD FOMC Press Conference

Oh and by the way, we do actually have FOMC tonight.

Following the terrible NFP print and the tightness of the Brexit referendum, I just can’t see any way that the Fed who put so much effort into ‘warning markets’ in an effort to make their hike as un-shocking as possible, would hike tonight.

Famous last words? Trade safe.

Make the switch to true ECN Forex Broker Vantage FX today!

Dane Williams – @VantageFX

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