Sept. 29, 2008
McCain contracts shed 10 percent of value in weekend IEM trading
Prices for Republican presidential candidate John McCain tumbled more than 10 percent in trading on the Iowa Electronic Markets over the weekend, so traders now believe he has less than a one-third chance of winning the popular vote.
At 9 a.m. Central Time Monday, the price of a McCain contract on the IEM's Winner Take All market was 32.7 cents. That means traders on the political prediction futures market operated by the University of Iowa's Tippie College of Business believe McCain has a 32.7 percent probability of winning the popular vote in November.
On Friday morning at 9, McCain's contract was selling for 37 cents.
Meanwhile, the price of a contract for Democratic candidate Barack Obama on the Winner Take All market was selling this morning for 67 cents, up from the 63.7 cents it was selling for Friday morning.
The Iowa Electronic Markets is operated by the UI'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.
On the IEM's Vote Share market, a McCain contract was selling for 47.3 cents this morning, which means investors believe he will receive 47.3 percent of the two-party popular vote in November.
A contract for Obama was selling for 53.8 cents on the Vote Share, which means investors believe he will receive 53.8 of the vote.
The IEM can be found online at http://www.biz.uiowa.edu/iem.
The latest presidential market price quotes can be found at http://iemweb.biz.uiowa.edu/quotes/Pres08_quotes.html.
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