Another thing to keep in mind is that the Palin pick has fired up the GOP base.
***Also, Intrade leads the polls on some issues and lags the polls on other items. It’s safe to say that in this area, Intrade lags the polls because Intraders were caught by surprise by the Palin pick for VP.
In addition, most Intraders are liberals. There’s a built-in bias of wishful thinking within each political contract that reflects this. For instance, Al Gore was still trading above $5 until recently and Hillary Clinton is still above $1 to win the presidency. Whoever can quantify this built-in bias will have a good arbitrage opportunity at Intrade.
I found one way to start quantifying the bias. This was posted on another Intrade thread.
To: SSS Two
So InTrade believes there is a 11% chance that Gov. Palin will withdraw after being nominated?
***Yes, if that’s her current price. It’s probably a good shorting opportunity, but I think you risk $89 + fees to make that $11. My understanding is that it still sounds like an interesting arbitrage opportunity, but you wouldn’t be able to collect until the contract expires November.
62 posted on Tuesday, September 02, 2008 12:44:20 PM by Kevmo (Obama Birth Certificate is a Forgery. http://www.freerepublic.com/tag/certifigate/index?tab=articles)
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To: Kevmo
Actually, this may be a reasonable indicator of the bias at Intrade. The contract was started because of Intraders sending in suggestions.
Her contract is ~$12 * 2074 volume =~ 24-25k of Price*Volume product worth of bias. It’s an interesting place to start to quantify the bias over there. Once you can quantify the bias, the new perspective should generate arbitrage opportunities.
Contract Bid Ask Last Vol Chge
PALIN.VP.WITHDRAWN
Sarah Palin to be withdrawn as Republican VP nominee before 2008 presidential election M Trade 11.5 13.0 12.0 2074 +9.0
63 posted on Tuesday, September 02, 2008 12:53:52 PM by Kevmo (Obama Birth Certificate is a Forgery. http://www.freerepublic.com/tag/certifigate/index?tab=articles)
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