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Should Have Bought the Obama Contract at 40
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Intrade's future markets are surging in support of a likely Obama win in the presidential race.
Just a couple of weeks ago, one could buy an Obama contract for 40, and it's now 77.7. McCain's contract is now at 23.1 after having been at about 56. If one feels strongly that McCain is going to lose this race, you could make a tidy bundle by shorting the McCain contract.
Intrade's electoral vote predictor now has Obama scoring 364 votes and McCain 174.
The Washington Post on the other hand has a more sober assessment of 168 solid Dem votes, 174 solid GOP votes, and 196 swing votes not fully solidified.
It is interesting that McCain's solid 174 are exactly the same as Intrade's 174 -- which means that according to Intrade's scales, Obama is picking up just about every state that isn't solidly GOP. Chris Bowers also takes a nice whack at the Washington Post numbers.
On other fronts, Zogby is just out with a release that Obama is at 49% and McCain slips to 43%.
538.com has Obama turning 349 electoral votes in with McCain at 189.
Finally, Gallup has Obama at 51% and McCain at 42%.
-- Steve Clemons
Editor's Note: Thanks to Brad DeLong for alerting me to some of this material.
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Reader Comments (11) - post a comment
I don't understand how the futures market works. If Steve had bought a contract for Obama at 40, say $100, and if Obama wins, then how much does Steve gain?
Bill...the way it works is if the obama to win contract is at 40 pts (or perceived to be at 40%)...then as the probability of his winning rises, the value of my contract rises. My contract would have risen from 40 recently to over 70 today. If he wins, the contract does go to 100....so I would have made 60 pts per contract for the number I purchased if I had gone in at 40 and then waited until Obama won and sold at 100.
to answer your question directly though...If I purchased contracts for just $100 at the 40 pt spot -- if Obama had won, I would have cleared about $150.00 above what I invested...or $250 in total.
Thanks for the explanation, Steve. A 150% on investment, not bad.....
But you can't buy Obama at 40 anymore, as folks know, he is priced at about 80% chance of winning and the value just is not there.
Of course, I think O has a 95% chance of winning, so I guess that is value.
If that contract dips below 66%, I think Obama is a decent buy.
Remember on election day Nov. 4th, the exit polls are probably going to be wildly skewed in Obama's favor from Fla, Va, NC, NH, Penn. So I really don't think this contract is every really going to recede to buyable levels.
The bottom line is Obama is the all but INEVITABLE president #44 and his ground game is going to more than offset any hidden anti-black racist vote. It is just not going to matter.
The real story is going to be Obama's massive and well-organized GROUND GAME in the swing states. That cannot be measured in the polls, but it will tack about 1-3% critical points in about 15 key states.
Article in Wash Post about that today.
and gone short the DJ :-)
I noticed that the Washington Post claims its
incomprehensible electoral vote numbers come from
RealClearPolitics, which has Obama at 313, not
counting the "leaners".
You can buy a contract on who is going to win the election? Sounds like gambling, not investing, to me...
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