Strategy · Event-Driven

ELECTION VOTE-SHARE LADDER

NeutralDefined riskAdvanced

Overview

Use election-vote-share contracts (e.g., 'Candidate X gets 48-52%') as a ladder. Buy the bucket your model assigns the highest probability to and sell the buckets adjacent.

Setup

1.Build a probabilistic forecast of vote share using polling averages (e.g., 538 model, RealClearPolitics).
2.Map your forecast to the available vote-share buckets.
3.Allocate proportionally to each bucket according to your probability.
4.Sell short the buckets your model says are over-priced.
5.Hedge the basket so total exposure is bounded.
6.Exit progressively as new polling sharpens your forecast.

Max profit

Sum of bucket payouts that resolve in your favor, minus shorts against you.

Max loss

Sum of bucket entry costs minus short proceeds.

Breakeven

Total cost of basket vs. expected payout from your probability model.

When to use

In high-volume election cycles with deep liquidity in vote-share contracts.

When to avoid

When polling is sparse. When your probability model is poorly calibrated.