Given the timespan of the bet (5 years) and the average user turnover on this forum, there is too much risk that any of us won’t be there in 5 years to honor this bet.
What I suggest instead:
- Let’s do a 5-year swap, settled monthly, on the relative performance of MSFT vs TSLA
- notional of the swap is 100CHF
- Leg 1 of the swap is Microsoft performance, dividends reinvested
- Leg 2 of the swap is Tesla performance, dividends reinvested
- initial fixings for both stocks is a written in my former message (TSLA: 157.46 USD, MSFT: 412.58USD)
Being long the swap means receiving MSFT performance and paying TSLA performance. Being short the swap is receiving TSLA performance and paying MSFT performance.
The swap is settled monthly and expires after 5 years. Both participant can choose to exit the swap during its lifetime after having settled the past month performance.
Example:
- Bob is long the swap, Alice is short it.
- on month 1, MSFT goes up to 433.21 USD and TSLA up to 163.76 USD. Compared to the initial fixings, that’s 5% for MSFT and 4% for TSLA. Netted, this is a 1% relative perf for Microsoft. Alice pays 1% of the notional, i.e 1% * 100CHF = 1 CHF to Bob.
- On month 2, MSFT goes down to 420.83 USD and TSLA goes up to 165.33 USD. Compared to the initial fixings, that’s a total perf of 2% for MSFT and 5% for TSLA. So a net advantage of 3% for Alice. But because Alice had paid 1% in month 1 to Bob, Bob has to settle 4% of the notional to Alice.