market prediction next president

market prediction next president - The Intrade.com...

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The Intrade.com political futures trade in a price range from zero to 100. For example, as of this writing, the contract on Barack Obama being the Democratic nominee is trading at about 57. After the Democratic National Convention in August, if it turns out that Obama is the nominee, the contract will be pegged at its maximum value of 100 — so if you bought it at 57, you'd have a profit of 43, for a return of about 75% for an investment of six months. But if Obama is not the nominee, the contract will get pegged at zero, and you'll lose your entire investment of 57. Before the convention while the contract is still trading, you can buy it and sell it at any time, taking little profits or losses along the way just like you could with any futures contract. And if at any point you wanted to bet that Obama would not be the nominee, you could sell the contract short. Just like soy beans or pork bellies. These markets have been around for several election cycles now, and they have proven generally to be
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This note was uploaded on 05/10/2008 for the course FIN 367 taught by Professor Han during the Spring '08 term at University of Texas at Austin.

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