All
Outcomes
Market
Price
AI Fair
Value
Value
Edge
AINRC
YesNo
DMK
YesNo
INC
YesNo
BJP
YesNo
BSP
YesNo
CPI(M)
YesNo
ADMK
YesNo
CPI
YesNo
AI Insights:
03.13 18:40 UpdatedFair Value Reasoning:
The market pricing exhibits extreme structural distortion. Firstly, the 'zombie options' (BSP, ADMK, CPI factions) command a combined premium of ~20 cents, despite having virtually zero mathematical probability of winning the 'most seats' in Puducherry (ADMK won 0 seats last time; BSP is marginalized). Secondly, AINRC is grossly overvalued (78c); the market is ignoring the 2024 Lok Sabha election results, where INC won a landslide in Puducherry with 53% vote share, signaling strong anti-incumbency. The fair value model slashes AINRC's premium, redistributing it to the viable opposition bloc (INC and DMK), while zeroing out the hopeless minor parties.
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Divergence
Significant divergence exists between market pricing and recent electoral data. The market prices AINRC at 78% implied probability based on incumbency. However, the 2024 Lok Sabha election results showed the INC winning Puducherry with a massive landslide (53% vote share) against the NDA alliance (AINRC/BJP). The market has completely failed to price in this major shift in political sentiment, severely undervaluing the potential for an INC/DMK flip.
