One of the more interesting places to watch during the Republican and Democratic Presidential Campaigns was the electronic prediction market over at Intrade.
For the most part, the markets for the individual candidates proved to be pretty accurate in predicting how the race would turn out in the long-run.
So, I thought I’d keep an eye on how the traders at Intrade are viewing the General Election.
Here’s the chart for Obama, which dates back to October 2006 (click on the image for a larger view):
The traders have Obama’s current market price at 61.0, which roughly translates into an assessment that Obama has 61% chance of winning the election in November at this time.
Here’s McCain’s chart, which dates back to July 2006:
McCain’s trading at 35.5.
There’s obviously a huge disparity here, but part of that may reflect that Obama just came off of an intense and long primary season. We’ll look at this again on July 6th and August 6th and then on a more regular basis when the campaign heats up after Labor Day.
You can find more detail about what prediction markets like Intrade are all about in this post by Brad Warbiany at The Liberty Papers.
June 6th, 2008 at 12:09 pm
Let me see if I understand this.
I buy Obama @ 61. I buy McCain @ 35.5. Total invested: 96.5.
Whoever wins, I get 100.
Huh?
Maybe there’s a >3.5% chance Bob Barr or Ralph Nader will win, but I doubt it.
Where do I sign up?
June 6th, 2008 at 4:57 pm
[...] with the Intrade numbers, we’ll look at this again in a month. [...]
July 10th, 2008 at 12:15 pm
[...] a month ago, I took a look at the Intrade electronic prediction markets numbers for the 2008 General Election. Back then, it showed Barack Obama being given a roughly 61% chance of winning the election in [...]
July 25th, 2008 at 10:09 am
gustavo,
That gap has to be there to compensate for time value of money. Investing 96.5 now you’d get 100 in 6 months time which is about right considering current interest rates. Intrade doesn’t pay interest on your funds. If you paid 100 now for 100 in 6 months, you’d be losing money versus a T-bill investment.
August 19th, 2008 at 12:44 pm
[...] started looking at the closing prices on the Intrade Prediction Market back in June, and then again in July. During that period, there wasn’t really that much movement for either [...]