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Implied Tradesports Dem House Gains
Crossing Wall Street ^ | 11/3/2006 | Ed Elfenbein

Posted on 11/03/2006 3:34:27 PM PST by oblomov

This is a favorite topic of mine. In investing, we can look at two markets and imply a third. That's basically how options work. Well...we can do the same for predictions markets.

At Tradesports, they offer futures contracts for how many seats they Democrats will pickup in the house. They offer contract for several different scenarios (i.e., greater than 14.5 seats, or greater than 19.5 seats). Assuming a logonormal distribution, we can find an implied mean and standard devation.

The chart above shows the mean number seats the Democrats looks to gain (black line) with plus and minus one standard deviation bands (red lines).

(Excerpt) Read more at crossingwallstreet.com ...


TOPICS: Extended News; Government; News/Current Events; Politics/Elections
KEYWORDS: tradesports; ushouse
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Real money prediction markets have a very good track record.
1 posted on 11/03/2006 3:34:28 PM PST by oblomov
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To: oblomov

I've been trying to put a tradesport ticker on my page. You know how to do it?


2 posted on 11/03/2006 3:39:30 PM PST by MaineVoter2002 (If you dont vote on election day, then who are you electing?)
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To: oblomov
A combination of bets on individual races would be a more useful predictor; each race in this scenario is independent of the other.
3 posted on 11/03/2006 3:40:02 PM PST by kingu (No, I don't use sarcasm tags - it confuses people.)
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To: oblomov

this is the general idea behind darpa's terrorism event futures market, and at the theoretical level made very decent sense. I don't think it was intended to become a MSM target, and was gutted, at least publicly.

I don't think your post will be popular though.


4 posted on 11/03/2006 3:41:03 PM PST by WoofDog123
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To: oblomov

For those who feel very confident that the polls are oversampling Dems, you can pick up a GOP Senate / GOP House contract on Tradesports and quintuple your money if right.


5 posted on 11/03/2006 3:41:41 PM PST by NittanyLion
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To: oblomov
Real money prediction markets have a very good track record.

As long as they have many participants. Tradesports markets haven't had the most extraordinary track record.

6 posted on 11/03/2006 3:43:38 PM PST by Petronski (CNN is an insidiously treasonous, enemy propaganda organ.)
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To: NittanyLion

That sounds like an easy way to make money


7 posted on 11/03/2006 3:44:51 PM PST by italianquaker (Democrats and media can't win elections at least they can win their phony polls.)
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To: oblomov
Real money prediction markets have a very good track record.

People invested heavily in "Dot Coms" in the late 90's only to watch them fall apart, all the while sustained and supported by the Clinton adminstration.

Perhaps all these people "investing" are people who are simply following the liberal polls. Much the same way the Clinton regeime touted the "new economy" they are embracing a future as promoted by liberal polling.

And as we have seen so many times before, liberal hopes seldom reconcile with the reality of a given situation.

8 posted on 11/03/2006 3:48:12 PM PST by Caipirabob (Communists... Socialists... Democrats...Traitors... Who can tell the difference?)
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To: NittanyLion
For those who feel very confident that the polls are oversampling Dems, you can pick up a GOP Senate / GOP House contract on Tradesports and quintuple your money if right.

How could you know that oversampling Dems is not cover for anticipated voter fraud?

9 posted on 11/03/2006 3:48:16 PM PST by ez ("Abashed the devil stood and felt how awful goodness is." - Milton)
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To: oblomov
I hope - lol!
10 posted on 11/03/2006 3:48:36 PM PST by Caipirabob (Communists... Socialists... Democrats...Traitors... Who can tell the difference?)
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To: italianquaker

If the GOP retains majorities in both houses, it will be. But approximately 80% of people are betting against that happening...


11 posted on 11/03/2006 3:50:15 PM PST by NittanyLion
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To: kingu
A combination of bets on individual races would be a more useful predictor; each race in this scenario is independent of the other.

I don't think they are statistically independnet, though. Things like Kerry's foot-in-mouth incidents may have small but non-trivial effects in many districts. Two probabilities that can both be affected by a common event are not independent.

12 posted on 11/03/2006 3:50:24 PM PST by supercat (Sony delenda est.)
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To: WoofDog123

Looks like a lot of people are betting on the Dems to take the House, if I understand it correctly.(which I probably dont..)


13 posted on 11/03/2006 3:50:51 PM PST by cardinal4 (Speaker of the House Nancy Pelosi..)
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To: NittanyLion

I think there will be alot of upset people one way or the other


14 posted on 11/03/2006 3:51:34 PM PST by italianquaker (Democrats and media can't win elections at least they can win their phony polls.)
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To: oblomov

Who did they predict for 2004? If they picked Jon Carry then we can take this with a very large grain of salt.


15 posted on 11/03/2006 3:54:30 PM PST by VictoryGal (Never give up, never surrender!)
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To: oblomov
What information do you suppose predictive market betters use to place their bets? Polls right? Or do you think they somehow have some hot inside scoop that leads them to place bets without consideration of what the rest of us are reading. The bottomline is...they are nothing more than poll followers. If you believe the polls, you bet on democrats right now. It's as simple as that.
16 posted on 11/03/2006 3:54:56 PM PST by Rokke
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To: VictoryGal
They picked exactly what the polls told them to pick. If you want a classic example of that, take a look at tradesports charts on Bush and Kerry immediately before and after the phoney exit poll data was released on election day 2004. Within minutes Kerry soared to a 75% or so odds on favorite. If the betters really had the inside scoop, nothing would have changed as a result of the bogus polls.
17 posted on 11/03/2006 3:57:45 PM PST by Rokke
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To: MaineVoter2002

Glennbeck.com has one , you could look at the source for their page...

As for the validity of Tradesports calling elections inside the US , you must know that the majority of betters are Europeans and they are getting their info from sources like the BBC , Reuters and CNN International ,, all socialist all the time networks. I'd put a bet down on maintaining house control..


18 posted on 11/03/2006 4:03:00 PM PST by Neidermeyer
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To: oblomov
Real money prediction markets have a very good track record.

And the traders are basing their decisions on what? Polls?

19 posted on 11/03/2006 4:05:37 PM PST by Fresh Wind (Democrats are guilty of whatever they scream the loudest about.)
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To: Rokke

Excellent observations. I mean, look at the Corker (R-TN) futures for the Senate. He's ~70.0 now, largely on the back of the public polls having him ahead by 8-10 points. However, NRO Corner reported today that GOP internals have Corker up by only 1-2 points and are mystified by the disparity with the public polls. If the GOP internals are correct, Corker should be trading in the range of only ~55.0-60.0.


20 posted on 11/03/2006 4:06:11 PM PST by AZ GOPher
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