Kalistan

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Observers Market sees faith in Gaduridos rise ahead of Coronation
Baltusia remains "Seleya's Riskiest Bet"
Sulari, Duchy of Suldanor
April 15, 5719


By Friday Close, line in Sulari on Gaduridos at lowest in 7 months

On August 1, 5718, 12-Month Contracts on Gaduridos were sitting right around where they had been since the opening of the Sulari Observers Market. The opening bids were for K$0.24, which ends up being about a 3/1 odds on improvement. The price of the contracts fluctuated slowly around that number, sometimes falling closer to K$ .20, sometimes going up to around K$ .27, but never very much higher.

But a string of trade news, as well as the approaching coronation of a new King in Gaduridos has essentially dropped the floor out of Gaduridos in the Observers market, and as of close of business today, with just three and half months left on the 12 month contracts, today's closing bid sits at just just over K$.55 cents, which cut the prospective earnings of the early buyers in more than half and triggering a fairly volatile last quarter on the contract as earlier buyers scramble to salvage what money they can, while new, more risk averse investors begin to come into Gaduri paper. Three month contracts are opening even higher for buyers, with the first contracts selling for 48 cents at the beginning of April, and rising to 59 cents by today's Close in the Observers Market.

Benito Gomez, who considers himself to be a major speculator in the market, was one of the early buyers. "Well, I bought in at 28 cents, which certainly wasn't the craziest price, but it was a good amount of profit that I am used to. I bought about K$7,500 at 28 cents. Had it stayed at 28 cents, I would have made about 19 grand profit on that little bet. When it got over 45 cents, I decided to sell out, because I couldn't watch it go over 50 cents... As a result, I still made about 9 grand, but lost the extra 10."

The Observers Market allows buying and selling of contracts before the end of the term. "The buying and selling is where the profit happens, because these guys are betting that the price per contract will go up or down. If it goes down, they will watch their profits go way up when the contracts finally settle, assuming their money is on the right side of the question," said analyst Marcia Walters, of the Sulari brokerage Krieger&Balzer. "Ideally, the real gamblers in the market want to buy in when the contract is very low, because every contracts settles for a peso, so if I pay 24 cents for some of these contracts like some of these guys, and it settles at a peso, that is 76 cents profit on each 24 cents I paid. If the final price is 18 cents, and the question is resolved your way, you end up with a LOT more money than when you started. If it settles the other way, of course, well, your money was on the wrong side and it gets split up among those who guessed right."

The Gaduri line in the observers market is seen as a feature of both increasing faith in Gaduridos' stabilization with increasing trade agreements with foreign countries, as well as administrative and budgetary reforms that are largely driving confidence among Kalistani speculators. "We usually see contract prices above 50 cents as we enter the realm of risk aversion," said Walters. "Speculators who buy in above 50 cents were people who are willing to sacrifice some of the profit guaranteed by picks at lower contract bids for a lot more assurances. You see more larger and institutional investors buying in as the bids get closer to 1 Peso, because while they may not be making a ton on each individual contract, they make their money by mitigating risk and volume. Which tends to signal to other more conservative speculators that the time is now right to get in. So you will see lots of volume as more and more and more news comes out that shows a place like Gaduridos tends to be stabilizing."

This is also borne out in the Observers Market, where Gaduridos this week had the second highest amount of money in the 12 Month Contract in all of Seleya, with close to 700 thousand Imperial Pesos worth of purchases alone, putting it just behind the risk averse institutional favorite in Kalistan. That number shows significant institutional leverage in the market, and tends to squeeze out all the retail investors and all but the bravest retail investors, most of whom are betting on the other side of the question. "We've seen large movements of money away from quieter corners of the globe into Gaduridos over the past 4 months especially," said Walters. "Our firm is predicting that the 12 month contract will close on July 31 above 78 cents. For those who bet on Gaduridos, that will mean a money line of about -355, which is traditional Kalistan/Xsampa/Luthori territory, certainly not Gaduridos' familiar haunts well into the Plus territory."

According to Walters, this means that, despite the lack of a formal, or even a very warm relationship between Kalistan and their formal Imperial partner, Kalistani speculators are quite bullish on the prospects for Gaduridos' stability in the upcoming month. New 12 month contracts will be issued in early May, just before the coronation, and the Futures Market is already at -112 that they open at 50 cents or above. Meanwhile, Seleya's riskiest bet, Baltusia, which closed this evening at +410, and which has largely been abandoned by institutional speculators, is at -400 that the next 3 month contract opens below .20 cents. "It would take a miracle for Baltusia to get out of the +400s," said Walters. If you want to lose your money, bet Yes on Baltusia."

@TheRepublic