Holy Crap! Bush still going up in Iowa Electronic Market (3 Aug)

[Remember_Salamis]

Bush is up on Kerry $0.538 to $0.46, almost 8 points!!! Bush got as high as $0.57 today and opened up a 10-pt lead!!! He's doing pretty good at Tradesports.com as well.

[Jet Jaguar]

Good news! I hope it continues.

[maro]

Let's not get over-excited. There may have been a lot of people who were short Bush on the theory that Kerry would get a post-convention bounce. They would be covering their bets this week. Let's see where the markets are in 10 days.

[Gunder]

Not to sound like a complete ignoramus, but what is this?!?!

[Keith in Iowa]

I'm not sure how to explain it - http://www.biz.uiowa.edu/iem/ is their web site - see if you can find an explanation that makes sense to you.

[no dems]

DITTO. It's been going on for some time now and I have no idea what it is myself.

[concerned about politics]

DITTO. It's been going on for some time now and I have no idea what it is myself.

I think it's like buying "Bush Stock" or "Dork Stock."

[ableChair]

It's a betting game, actually. Instead of just answering a poll it requires you to back up your choice of president with money. The theory is that by doing that you will be more honest (people lie in polls, for some reason). It has been incredibly accurate in the past, much more so than typical polls.

[goldstategop]

Exactly. What people back with their money is more telling than what they back with their mouths. People can lie but what they choose to spend it on tells you where they really stand. We'll see if this stays up by month's end. And if Bush does get a bounce out of his convention, I expect the lead to be a lasting one.

[concerned about politics]

My cash is on Bush. Dork man doesn't stands a chance. The guy is simply unlikable.
He's yet to "tell us his secret plan" on just about everything. All we know about him is he was in Nam 35 years ago, and AWOL the rest of the time, because he refuses to discuss it.
Plus, he frenched a hamster. That one is hugh. Seriesly.

[Crispy]

Is this market for real? Can I actually buy or sell short the candidates? What about options?

[goldstategop]

Yes, you can buy shares. The Minor League Baseball bobbleheads work on the same principle. Markets don't lie.

[rebel_yell2]

In this market, you are buying a futures contract that pays you $1.00 if event X occurs, where event X is the election of particular candidate Y. So, if there are two candidates Y and Z, and each is equally likely to win, the fair price for each would be $0.50. Market participants, i.e., investors, bid the prices up or down depending upon their expectations for the election outcome. If, on average, market participants think that Bush is more likely to win, then they will be willing to pay more for a Bush contract. Conversely, they will be willing to pay less for a Kerry contract. You interpret the price as the market's current assessment of the probability that a candidate will be elected. As the price goes up, so does the probability that candidate Y will be elected.

In past elections, these contracts have been incredibly accurate in predicting the winners, at least as election day approaches. That is because people are betting real money on the outcome. Or as some say, money talks and bullsh** walks.

[Remember_Salamis]

Bush is picking up steam in the "Vote share" market as well.

[Windsong]

"My cash is on Bush. Dork man doesn't stands a chance. The guy is simply unlikable. He's yet to "tell us his secret plan" on just about everything. All we know about him is he was in Nam 35 years ago, and AWOL the rest of the time, because he refuses to discuss it. Plus, he frenched a hamster. That one is hugh. Seriesly."

ROTFL..

You mean his uh..wife? :)

[SAJ]

Correct in your analogy, save that the difference between Iowa and Tradesports and other electronic books is that the stock ''expires'' when the event in question (elections, sports matches, whatever) is resolved.

[calenel]

Remember that big hullabaloo about the terror stock market idea (Policy Analysis Market) that got the Bush Administration ridiculed by the libs because it was such a horrible idea? Actually, the libs just couldn't understand the science behind it, which is sound. This is the same thing, just applied to the election.

Here's a link to another, similar site.

[SAJ]

Yes, you can buy or sell short at will, assuming only that there's an existing complementary offer or bid, or that one comes into existence before the event in question is resolved.

No options yet, although yr hmbl srvnt has been having talks with a couple of these books about establishing an options mkt. This is tricky, logistically -- the spreads on options on named events are apt to be SO wide that no one will play, therefore the book will almost surely have to offer some sort of ''sweetener'' to the punter. Either that or attract market-makers on VERY favourable terms.

[uglybiker]

I think it's like buying "Bush Stock" or "Dork Stock."

Or Blue-chips vs. Junk Bonds.

[TheMole]

Plus, he frenched a hamster.

You're so negative. Kerry's heroism in the attempted resuscitation of the drowning rodent shows that at least one U.S. Senator from Massachusetts is capable of a water rescue.