Barack Obama to win 2008 US Presidential Election  

Last Price:  80.5    0.5  

You can buy
this at 81.0    

You can sell
this at 80.5    

2008 US Election - 2008 Presidential Election Winner (Individual)  
John McCain to win 2008 US Presidential Election  

Last Price:  19.2    1.9  

You can buy
this at 19.7    

You can sell
this at 18.6    

There's more...

(crossposted at Motley Moose)

Nate Silver at FiveThirtyEight has an interesting post about why Intrade's futures prices have barely reflected the major upswing in Obama's polling over the last week.  After the GOP convention, when McCain passed Obama in the polls for the first time, bettors priced McCain as high as 54% midday on Sep 13, a really scary number.  But when the polls began to move back Obama's way last week, prices were sluggish to respond, and still have only got Obama at 52, which given the electoral math, is almost certainly undervalued.  Most other betting sites currently price Obama above 60%, while 538 itself puts him above 70%.  For markets to be this far out of sync is bizarre:

This is the equivalent of the Giants being 3-point favorites at the Bellagio Sportsbook, and 7-point favorites at the Mirage down the block. Those things just don't happen in efficient, sufficiently liquid markets, because they create arbitrage opportunities: you'd lay $10,000 on the Giants at the Bellagio and $10,000 on their opponents at the Mirage. Any time the Giants win by fewer than 3 points or more than 7 points, you lose nothing, since your two bets cancel out. But any time they win by fewer than 7 points but more than 3, you win both bets, and take home $20,000 (less the casino's vigorish) for absolutely no risk. Pretty good deal, right? That's exactly what's happening with these futures contracts.

There's more...

I regularly check the political stock markets and I think they are relatively good predictors of political outcomes.

Here is the general idea from slate.com

The idea behind political prediction markets is simple. Lots of people wager on the outcome of political campaigns: Who's going to be the Democratic presidential nominee? Will the Republicans take back the House? And when the votes are counted, the winning bettors collect. The thrill of prediction markets for political junkies is that they harness "the wisdom of crowds." A single person's bet on an election outcome isn't very good, but thousands of bets, with real stakes, are more likely to predict the correct result than even the best pundit. The Iowa Electronic Markets, the big daddy of the political prediction markets, is consistently better at forecasting winners than pre-election polls. (Read a 2003 Slate "Explainer" about prediction markets here.)

For example if you look at the intrade graph for Obama, you can clearly see that many people felt it was a safe bet that he would probably win the nomination after his win streak in February.  

There's more...

I have grown increasingly frustrated as the day has worn on. I keep seeing supporters, especially of Senator Clinton, referring to recent polls as evidence that she is more electable.  The fact is that we don't know who is more electable right now because there are simply too many variables, including what the months ahead have in store.  One thing is fairly certain, given the mixed and changing results in snapshot state and national polls, the Democrats would be foolish to select a candidate based on them.  

Further, in spite of what we hear from the Clinton people, there is no such thing as a national popular vote. http://msa4.wordpress.com/  Too many apples and oranges. There are caucus and non-caucus states.  There are states that have included independents and those that haven't. Some have allowed party cross-overs and some have not.  These election results can't be combined into one figure, and especially not into a figure that will satisfy everyone. Bottom Line: if the Democrats back off from using the delegate count in nominating their candidate, and try to substitute a bogus national popular vote, they will be courting calamity.  (Few believe that such a substitution will actually take place. But as long as people keep talking about a popular vote, it pushes closure off into the horizon.)

If you really must have some numbers at this time, the odds are that the results from Intrade are probably more accurate than any one set of polls.  Of course Intrade isn't always accurate and its traders change their minds.  But it has a pretty good record. Interestingly, in the face of all of the current polls, as of 12:00 AM, May 23rd, the traders think Obama is going to beat McCain. http://www.intrade.com/jsp/intrade/contr actSearch/
Notice that there have been hundreds of thousands of trades, that is, "bets." 

The figures in order refer to:
Contract      Bid    Ask    Last     Vol       Chge

        2008.PRES.OBAMA
Barack Obama to win 2008 US Presidential Election    M     Trade        57.3    57.4    57.3    157381    +0.9
    2008.PRES.McCAIN
John McCain to win 2008 US Presidential Election    M     Trade        38.1    38.3    38.2    202761    -1.8
    2008.PRES.CLINTON(H)
Hillary Clinton to win 2008 US Presidential Election    M     Trade        5.8    6.7    6.8    294285    +1.0

There's more...

A rumor is spreading through DC (my town) like wildfire from high ranking sources:

Hillary Clinton will avoid humiliation and drop out this Friday, FEBRUARY 29th.

Suddenly, on Intrade, shares of "Dropout.Feb08.Clinton" have surged almost 800%.

Is that a result of the rumors or is someone in the know putting their money where their mouth is?

There's more...