Bush up 60 to 40 on Tradesports

Tradesports ^ | 10/13/2004

[ThinkDifferent]

It's a betting market where you can buy "options" on various events, including the election. If Bush wins a Bush option will pay $100, so the fact that they're selling for $60 means that the market collectively believes Bush has the advantage. In theory markets like this are better predictors than polls because people are backing their beliefs with real money.

[Recovering_Democrat]

What was it before? I think the gap was not as wide...can someone tell me?

[Plutarch]

After an initial Bush boomlet to nearly 60, GWB’s futures fell to roughly 55. I don’t understand this. GWB’s performance far exceeded anyone’s expectations (we scarcely hoped he could be so good), and as a result he plummets on Tradesports. I am scratching my head.

[drangundsturm]

After an initial Bush boomlet to nearly 60, GWB’s futures fell to roughly 55. I don’t understand this. GWB’s performance far exceeded anyone’s expectations (we scarcely hoped he could be so good), and as a result he plummets on Tradesports. I am scratching my head.

You have to understand that markets don't move in straight lines. When the price soared to 60, you probably had people who were sitting on substantial gains, who maybe bought in the mid 50s just a day or two earlier. They are simply taking profits, it does not necessarily reflect a feeling that bush was hurt by the debate. "Sell into good news" is an old wall street adage that often applies.

You also may have some people who are still evaluating the effect (or lack of effect) of this debate on the race, who are being cautious. It normally takes a few days for these things to settle out before investors reach a collective opinion.

My opinion: you'll see a zigzaggy market with an uptrend over the next week.