Liv-ex has entered into a partnership with Matchbet - a new online betting market – enabling participants to place bets on the level of the Liv-ex 100 Fine Wine Index at month end (markets are currently open for a number of month-end closes, from August 2009 to March 2010).
This new initiative allows you to bet on the future direction of wine prices without taking physical delivery of the goods. It is ideal for those wishing to hedge their cellar, or simply speculate that the price of wine will go up or down, without worrying about provenance, storage or insurance costs.
Participants can either offer their bets at their own proposed odds (this is the equivalent of submitting limit orders in financial markets), or take the current market odds.
The system works by providing a number of possible base ranges for the level of the index, which can either be ‘backed’ (betting that it will happen) or ‘layed’ (betting that it will not happen). Users can also create their own price range by combining different pre-defined price bands (this is described as ‘Multi-win’ market, and works by a simple drag and drop mechanism). This level of interactivity is one of the unique features of the Matchbet offering.
Odds are worked out instantly and displayed to the user, as determined in response to the current book of limit orders in the system. Odds are presented as ‘decimal’, i.e. represent winnings plus deposit as multiple of the stake put at risk. So, an even odds bet on a given level is quoted as odds of 2.
To bet on the level of the index at the end of August, or any other month, visit www.matchbet.com. A step-by-step online tutorial is also available under the help section on Matchbet’s site. You need to be registered as a user (which is easy to do on their site) to bet, but you can view the market by registering as a ‘guest’.
Ben Seifert, founder of Matchbet, commented on the launch:
“All of us at Matchbet are absolutely delighted to be working with Liv-ex, whose indices are the authoritative source of information about the state of the fine wine market. We believe that Liv-ex’s users will benefit from an ability to both hedge, and speculate, on Liv-ex’s price indices. The market has just been launched, but already there are significant betting opportunities. I believe that the market will quickly develop into a major companion site to Liv-ex for all those seriously interested in the wine industry.”
