Simmons–Tierney bet
The Simmons-Tierney bet is a bet made in August 2005 between Houston banking executive Matthew R. Simmons and New York Times columnist John Tierney.[1] The stakes of the bet are US$10,000.00. The subject of the bet is the year-end average of the daily price-per-barrel of crude oil for the entire calendar year of 2010. The bet is to be settled on January 1, 2011.
Simmons and Tierney had never met before. But their association began after Simmons had been interviewed by a journalist colleague of Tierney's, Peter Maass, for a New York Times Magazine article called "The Breaking Point," published on August 21, 2005. The article heavily emphasized the doomsday claims of Simmons latest book Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy. That book is his prophecy of imminent global catastrophe which he asserts will be triggered by the allegedly soon-coming "peaking" of Saudi oil output, and the supposed domino effect of destruction that he says will subsequently be wreaked upon the global economy. Tierney's dubious reaction to the article prompted him to call Simmons, introduce himself, and ask Simmons to back up his claims with cash. The friendly wager was immediately worked out over the phone.
Terms of the bet
Of the many claims that Simmons made in the Times article, his prediction of a tripling in the price-per-barrel of crude struck Tierney as perhaps the most incredible. In the Peter Maass article, Simmons was quoted as saying:
"We're going to look back at history and say $55 a barrel was cheap," [Simmons] said, recalling a TV interview in which he predicted that a barrel might hit triple digits. [Simmons] said that the anchor scoffed, in disbelief, "A hundred dollars?" Simmons replied, "I wasn't talking about low triple digits."
So Tierney focused upon that one detail and the two men fashioned the bet accordingly. Their final agreement was a commitment to tabulate every closing price-per-barrel of oil for each market day of 2010, then average out those prices for the entire year from January 1 through December 31, (adjusted for inflation to 2005 prices). If the year-end adjusted average comes out to $200.00 or more per barrel, Mr. Simmons wins. If it averages out to less than $200.00, Mr. Tierney wins. The winner takes the entire pot of US$10,000.00, plus interest ($5,000.00 from both parties, currently sitting in escrow).
The bet was made public just two days later in an op-ed piece by Tierney published in the New York Times, August 23, 2005 called "The $10,000.00 Question".
Links
- http://www.nytimes.com/2005/08/23/opinion/23tierney.html
- http://www.twilightinthedesert.com/
- http://www.theoildrum.com/ - The Oil Drum
References
- ^ The $10,000 Question, The New York Times, By JOHN TIERNEY, Published: August 23, 2005
This article is licensed under the GNU Free Documentation License. It uses material from the Wikipedia.
Operational procedures of the bookmakers
By adjusting the odds in his favor or by having a point spread, the bookmaker will aim to guarantee a profit by achieving a 'balanced book', either by getting an equal number of bets for each outcome, or (when he is offering odds) by getting the amounts wagered on each outcome to reflect the odds. When a large bet comes in, a bookmaker can also try to lay off the risk by buying bets from other bookmakers. The bookmaker does not generally attempt to make money from the bets themselves, but rather profiting from the event regardless of the outcome. Their working methods are similar to that of an actuary, who does a similar balancing of financial outcomes of events for the assurance and insurance industries.
This article is licensed under the GNU Free Documentation License. It uses material from the Wikipedia.
Independent events for betting strategies
The following betting strategies apply to games which operate on independent events. For such games, the odds of a particular outcome are identical for every bet played. No such strategy can beat the house edge (if any) in the long run, and all of them trade off many small wins for a big loss or vice versa.
- Martingale - doubling bet after each loss until a win is achieved (or fails when the amount of the bet becomes excessive)
- Kelly criterion
- Split martingale
- Anti-martingale
- d'Alembert
- Contra d'Alembert
- Regression
- Paroli of Three
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History of betting exchange
The concept of peer-to-peer betting - the precursor to a betting exchange - was first brought to the public by the UK website Flutter.com in May 2000. At the same time Irish-based betting exchange Betmart.com was launched into the UK. Soon after, UK-based Betfair launched what it originally called "open-market betting", in June 2000 - a name which was quickly changed, by the media and the associated industry, to "betting exchange". Betfair embraced a pure exchange model - one Flutter later adopted and, some say, even improved upon in places - but it took a year before Flutter launched their new technology, and first-mover advantage proved decisive for Betfair. Though Flutter managed to climb to a reported 30% market share, Flutter's backers were content to broker a merger which left Betfair the dominant partner by a reported ratio of 84:16. Post merger, Flutter's customers were transferred to Betfair's system, which was later upgraded to embrace some of Flutter's functionality. Betfair went from strength to strength and controls a reported 90% of global exchange activity today. In late 2004, Betfair announced a rescue package which resulted in it absorbing the customers of Sporting Options, which had gone into administration with debts in excess of £5 million.
As with other types of exchanges, betting exchanges thrive on liquidity and customers tend to focus on the exchange where they are confident their bet can be paired up with a matching counterbet. Breaking with British tradition, Betfair uses decimal odds instead of fractional (traditional) odds because they are more popular globally. Some of its competitors allow customers to use fractional odds if they prefer.
Unsurprisingly, Betfair's success has attracted a number of rivals.
This article is licensed under the GNU Free Documentation License. It uses material from the Wikipedia.
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