Intrade is prediction market. People buy and sell contracts based on outcomes. If you own one of the 2008.Pres.Clinton(H) contracts and Hillary Clinton does become President, you get $10. Right now, that contract will cost you about $4.85. That's more than a 100% return in just over 1 year. Not bad. Google (GOOG ) would have to be trading at $1,300 per share to give you the same return.
There is a lot of subtlety in the market information - nothing is guaranteed. But, if you take the contracts with the highest price in each area, here is what the market is predicting today (Oct 19, 2007)
- Hillary Clinton is going to be the next President of the United States
- Barack Obama will be Vice President
- The Clinton / Obama Democratic ticket will defeat Giuliani / Huckabee Republican ticket
- The Democrats will control the US Senate after the 2008 elections
- The Democrats will control the US House of Representatives after the 2008 elections
This is a very long way out. And some of the contracts are trading at values that indicate little market certainty. Huckabee as the Republican VP candidate is the contract with the highest current price, but that price is only 16 to 18, or $1.60 to $1.80 to buy a contract that pays $10 if he is, in fact, the Republican VP candidate.
What do you think about the quality of these predictions?
- <input id="dem-choice-9" name="dem_poll_3" type="radio" value="9"><label for="dem-choice-9">None of these things will prove correct</label>
- <input id="dem-choice-10" name="dem_poll_3" type="radio" value="10"><label for="dem-choice-10">Intrade has the party results correct, but not the specifics</label>
- <input id="dem-choice-11" name="dem_poll_3" type="radio" value="11"><label for="dem-choice-11">Intrade is spot on in every detail</label>
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