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Mechanics of buying a 'No' contract

I have a question.  To give some background, let's consider this market:


https://www.predictit.org/markets/detail/2704/Which-party-will-control-the-House-after-2018-midterms


There are two contracts:

Dem

GOP


You can Buy 'NO' on the Dem contract for 31c.

You can Buy 'NO' on the GOP contract for 66c.


What if I bought both contracts?

31 + 66 = 97 cents.


Shouldn't one of the contracts (at least one of them) settle to a 'No'?

Thus, would I not be receiving $1 for sure?


Maybe I am not understanding the mechanics, or there are additional considerations that I don't know.


Thank you in advance.


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You pay commission on the winning contract, not the net win.  That eats up the arbitrage opportunity.


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You pay commission on the winning contract, not the net win.  That eats up the arbitrage opportunity.


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There appears to also be a hidden third option if a tie occurs due to a representative that is an independent or doesn't caucus with the two parties.

As far as I understand it, only one of those options will be true. 


In this case, it was the Democrats who took the house, so your NO bet on GOP for $0.66 would get you $0.34/share.


The other NO options would become worthless. Assuming you bought equal shares of both NOs, you would have gotten a $0.03 profit per share when you factor in all your NO bets:


$0.34 (NO GOP profit) - $0.31 (NO DEM loss) = $0.03 


My math or thinking may be wonky but I believe that's how it should calculate for you.

Yes, you would earn 3 cents, as I understand it.

crickets... I have same question

The sites charges a commission of 10% of your profit, so in the above example you bought the No on the GOP for $0.66 and you receive $1.00 when it resolves.  The $1.00 represents $0.34 in profit, so you pay a $0.03 commission for selling that share.  So you only net $0.97, which was what you paid for both No.  If in fact the GOP had won, your profit would have been higher, you bought the No Dem for $0.31, and it resolved for $1.00, which is a profit of $0.69, so you pay a commission of $0.06 or $0.07 (depending if they round or trunc).  So in that case you actually lose money.

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