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Stock Market Betting: Amazon Looks Well Positioned For ‘Social Distancing’

James Murphy by in Financial on
  • With most sports on hiatus due to the coronavirus pandemic sportsbooks are offering new and unique betting markets.
  • Financial betting is already very popular in Europe but is new to North American facing sportsbooks.
  • The recent volatility in world financial markets makes this a particularly tricky wagering proposition.

Since the ongoing coronavirus pandemic began wreaking havoc on the world financial markets we’ve been discussing the US stock market performance in terms of how it influences–and reflects–the changing dynamics of the 2020 Presidential race. In the early days of the US response to the pandemic there was a very close correlation between the stock market and Presidential betting odds. Initially, Joe Biden made up some ground on Donald Trump due to the President’s tone deaf speech to the nation on the coronavirus pandemic. That didn’t last long as the Democrats crisis and as Trump’s grasp of the urgency of the situation has improved he’s regained his footing.

Now we can apply our analysis of the financial markets directly. With the majority of sports around the world at a standstill due to the pandemic bookmakers have become increasingly creative to keep the betting boards full. At BetOnline.ag, they’ve found a variety of interesting markets from reality TV to pro wrestling. They’ve also started offering proposition wagers on the US financial markets including the overall market performance metrics such as the Dow Jones Industrial average as well as individual stock performances.

FINANCIAL MARKETS RIDING A ROLLER COASTER

These financial props are not only something that we can handicap they currently are very appealing to ‘action junkies’ as well. The overall markets are down by 10% or more but they’ve simultaneously experienced unprecedented volatility that has produced days with record losses followed immediately by record gains. In the short term, it’s likely a pointless endeavor to try and predict where the broader markets will go. Just check out any of the financial news and information sites and you’ll see a completely divergent range of opinion on how the coronavirus crisis will play out and how it will impact the financial markets and the world economy.

Instead, we’re going to focus on specific stock performances. The BetOnline.ag markets ask bettors to back the ‘Over’ or ‘Under’ of a particular stock’s market close price on March 31. That’s not a particularly long time horizon but it does give us at least a little buffer from the day to day fluctuations of the stock market. Over the next week or so we’ll feature attractive betting positions on these financial market wagers.

ONE STRATEGY: FOCUS ON STOCKS OF COMPANIES PEOPLE CAN’T LIVE WITHOUT

This strategy can be applied literally–to pharmaceutical companies and biotech firms–as well as metaphorically. In this case, it might be a little of both. Let’s take a look at our first stock market proposition:

AMAZON STOCK PRICE ON MARCH 31 CLOSE (AMZN)

OVER 1750 US DOLLARS -130
UNDER 1750 US DOLLARS -110

This one is almost a ‘no brainer’. Over the past decade Amazon has played a large part in the systemic transformation of the retail industry. Now they’re in a very unique position to benefit greatly from the ‘social distancing’ trend. Current Amazon customers will come to rely even more on the company in the weeks to come. They’ll also attract new customers or at the very least transform casual customers into regular ones.

And then there’s the proposed economic relief plan. In addition to financially backstopping vulnerable industries such as the airlines the Federal government wants to get money directly into the hands of American consumers. Although the details are still in the works it now appears certain that at some point Americans will be getting a check from Uncle Sam. So with money in consumer pockets but with many retail stores closed for the indefinite future who do you think will benefit? If you said ‘Amazon’ go to the head of the class. In fact, one financial writer quipped that the relief plan could be called the ‘Amazon Subsidy Plan of 2020’.

There’s plenty of investment analysts who like Amazon to prosper during the Coronavirus crisis. You can add me to the list and that makes this bet look like a slam dunk winner on the ‘Over’. Amazon stock closed today at 1,830 and held up reasonably well despite big losses in the overall market. Taking a position on any stock does expose you to the day to day volatility of the financial markets but it’s hard to see Amazon not coming out of this crisis in good shape.

BET AMAZON STOCK PRICE ON MARCH 31 OVER 1750 USD -130

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