Posted on 05/27/2010 9:32:49 AM PDT by Christian_Capitalist
How the Smart Money is Betting: Rand Paul moves up 14 points in one week (Intrade)
Christian_Capitalist
May 27, 2010
Well, the early results are in from Rand Paul's first few interviews and the Republican Unity Rally, and in one week the "Republican Rand Paul to Win" Contract has moved up 14 points, rallying from 50% to a commanding 64% lead, having moved up steadily for most of the week. Concurrently, of course, the "Democrat Jack Conway to Win" Contract has collapsed from 50% to a most recent trade of 36.5% as sellers are dumping the contract (due to differences in bid/offer spreads and what not, totals do not always equal exactly 100%).
Given the historic accuracy of the Intrade Prediction Markets (see article below), Republicans can take comfort in the fact that apparently, "Parker Lewis Can't Lose". Despite his initial gaffes, Rand Paul's subsequent recovery has now resulted in the arguably-smartest political odds-makers around now favoring him to win over Jack Conway by a margin of almost 2 to 1. Not bad for the first week of the General Election campaign.
CNBC Features Intrade - Cashing in on the election
Monday, Aug 25, 2008
"It's your money, your vote and... your trade," CNBC's Scott Cohn takes a look at Intrade's, real money, prediction markets that "some political experts swear by."
The CNBC feature, aired on Monday 25th August 2008, discusses Intrade's ability to predict the outcome of the 2008 election.
"Trading volumes are five times higher this 2008 cycle, to-date, than for all of 2004" according to Intrade CEO, John Delaney. Justin Wolfers, of the Wharton School of Business (University of Pennsylvania), comments that small markets "end up yielding very accurate predictions."
The Wharton School of Business has found that Intrade has a margin of error of 1-1.5%. This margin of error is approximately half that of comparable Gallup Polls which has been a benchmark of accuracy in predicting the outcome of US presidential elections for many years.
Can the Intrade crowd predict the election? Some say volumes are too small, others say it predicted 50 states correctly in 2004 and with over $100m traded on US Politics this election cycle so far. "Maybe, these virtual crowds really are wise."
Absolute accuracy aside, Intrade seems to predict better than many others and gives a real-time snapshot of market sentiment 24/7.
One Christian libertarian in the Sentate is better than none.
I meant “smart” money ... we dont know whether the smart money is buying or selling.
Oh. Well, in that respect, I’d say that the Wharton School’s study offers evidence that it is the Intrade Market itself that is “smart money” — i.e., that the aggregate of trades on the Intrade Market, taken together, is a highly accurate “daily snapshot” of the current race (similarly to a very low-error-margin traditional Poll).
...for those interested. :D
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