It does not mean that, and what you've been saying is wrong.
All it means is that the Intrade contract is priced at 6 (which I believe is actually 60 cents).
All it means is that the Intrade contract is priced at 6 (which I believe is actually 60 cents).
***A contract priced at 6 translates to a 6% probability, per Intrade’s spiel. See, look below, once again, it says stuff like “ contract was trading at 63, meaning, traders gave him a 63% chance of being re-elected. “ You’re using the word, “means” — all it means. They’re using the same word with a different suffix — meaning. What it means. That is what it means.
Since our contracts trade between 0 and 100, you can think of the price at any time to be the percentage probability of that event occurring. Let’s go back to our George Bush example, on December 1, 2003 the George Bush re-election contract was trading at 63, meaning, traders gave him a 63% chance of being re-elected.
If you thought President Bush will be re-elected you would expect that price to go up - towards 100. In that case, if you bought one contract at 63 and Mr. Bush did get re-elected you would make the difference between your purchase price - 63 - and the closing price - 100 - or 37 points. How much profit would that be? Click here.
It’s important to realize that you don’t have to hold your contracts until the result of the event is decided - you can get out of your position at any time until the event is over. So if you change your mind about the outcome you can come back to the exchange, enter an order and close out your position, whether it’s for a profit or loss depends on you.