Screen readers: Two navigational links to follow.Skip to site navigation.Skip to page content.
The University of Iowa News Services
The University of Iowa News Services Home News Releases UI in the News Subscribe to UI News Contact Us

University of Iowa News Release


Jan. 4, 2008

Obama, Huckabee up; Clinton, Romney down on Iowa Electronic Markets

Republican Mike Huckabee and Democrat Barack Obama have much better chances of becoming their parties' presidential nominees, based on a jump in their contract prices on the University of Iowa's Iowa Electronic Markets following Thursday night's Iowa Caucuses.

But as of Friday morning, Democrat Hillary Clinton and Republican John McCain still lead their respective markets, meaning investors believe the two are most likely to be on the ballot in November.

Huckabee and Obama were the clear winners in Thursday's first-in-the-nation Iowa caucuses, each posting significant wins over second-place finishers Mitt Romney, a Republican, and John Edwards, a Democrat. The prices of their contracts on the IEM reflected that. Investors boosted the price of a Huckabee contract to 20.3 cents as of 9 a.m. CST Friday, meaning they believe he has a 20.3 percent probability of being the Republican nominee.

At 4:30 p.m. Thursday, before the caucuses began, the value of a Huckabee contract was 13 cents.

Obama prices, meanwhile, were at 46.6 cents Friday morning, well up from the 30 cents they were at before the caucuses convened.

Both, however, remain in second place on their respective markets. Clinton leads the Democratic market at 49.7 cents, although that price is well off the 59 cents she was at the day before and is close enough to Obama's price that the two are essentially in a dead heat, said Joyce Berg, director of the IEM.

Meanwhile, McCain still leads the Republican market with a price of 34 cents, up 2 cents from the day before despite his third-place tie in Iowa.

Thursday was also one of the largest trading days in IEM history, said Berg, who is also a professor of accounting in the UI Tippie College of Business. More than 20,000 contracts traded hands Thursday on the Democratic market, and more than 15,000 on the Republican.

Berg said investors are making more trades now that they actually have real numbers to work with.

"When the candidates really campaigned hard in the closing days of the caucus campaign and there was something to win or lose, it gave investors more information to work with," said Berg. "Now that the caucus is finished, investors have some actual data to analyze and determine a candidate's value."

Much of that analysis is saying that Romney's perceived distant second-place finish in Iowa will seriously hurt him heading into Tuesday's New Hampshire primary. That was reflected in the prices for his contract, which collapsed after the caucus, dropping from 25.9 cents Thursday afternoon to 16.7 cents Friday morning.

Other Friday morning prices on the Republican market include Rudy Giuliani at 22.5 cents and Fred Thompson at 3 cents, both largely unchanged from Thursday. The Rest of Field contract was at 4.9 cents.

On the Democratic market, prices for Edwards fared poorly after his second-place caucus finish. His price dropped from 11.7 cents Thursday afternoon to 3.2 cents Friday morning.

The Democratic Rest of Field market, now limited mostly to Democrat Bill Richardson, dropped to 0.5 cents.

Berg said prices may or may not continue to be volatile as other states hold their nominating contests in the next month, leading up to the Feb. 5 Super Tuesday primaries.

"The markets' stability or volatility depends on the results in those states," she said.

The IEM markets will pay off when the two parties officially name their presidential nominees at their respective conventions this summer.

The Iowa Electronic Markets is operated by the University of Iowa's Tippie College of Business as a real-money futures prediction market. Begun in 1988, the IEM is a research and teaching tool that has achieved an impressive prediction record, substantially superior to alternative mechanisms such as opinion polls. Such markets have been significantly more accurate than traditional tools in predicting outcomes ranging from political election results to movie box office receipts.

The IEM can be found online at Nominating market prices can be found at

STORY SOURCE: University of Iowa News Service, 300 Plaza Centre One, Suite 371, Iowa City, Iowa 52242-2500.

MEDIA CONTACT: Tom Snee, 319-384-0010,