Wednesday, 12 December 2012

What is "Nikki math"?

Whoever reports the weekend box office numbers first will be the one who gets their article read.  So when it comes down to either doing it fast, or doing it right, doing it fast wins every time.

Both Variety and the Hollywood Reporter often make early box office reports on Friday evening, but the undisputed ruler of early box office numbers is Deadline Hollywood.

Deadline is frequently first, but also frequently wrong when it comes to extrapolating the Friday numbers to weekend figures.  This wrongness is referred to as Nikki math, named for Deadline's founder and editor-in-chief Nikki Finke, although the math is probably done by the studios she is talking with based on the early information they have.

Nikki math offers both opportunities and risks to traders.  In the immediate term, players will trade according to Deadline's estimate - even if they believe the estimate is wrong.  This is because they also know how other players will trade it, and there is often more money to be made from playing the players than from being right.

But eventually, the math will get questioned by someone on the boards, Variety or THR, or even Deadline itself as new information comes in and the site changes its numbers without warning.  Trading by Nikki math is just like any other form of day-trading - if you're not playing close attention to the boards and to moviestock prices, you can get burned very easily.

So if you're not too busy on a Friday night, Nikki math can provide you with some decent trading opportunities, but at the same time you can't take Nikki math for granted.

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