Ryan nod leads to Obama gains on Iowa Electronic Markets

[cyberswede]

The early winner from Paul Ryan’s vice presidential candidacy appears to be Barack Obama, according to Iowa Electronic Markets traders.

The price of a contract representing Mitt Romney’s winning the popular vote in November has fallen more than 5 percent on the IEM’s Winner Take All market since he named Ryan as his vice presidential candidate Saturday morning. His contract had been trading for 41.3 cents before the nomination was announced, but more than 2 cents to 38.9 cents Tuesday morning.

The Tuesday price means the market believes Romney has a 38.9 percent chance of winning the popular vote in November.

Read the rest: http://now.uiowa.edu/2012/08/ryan-nod-leads-obama-gains-iowa-electronic-markets

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Love it!

[Amak8]

1. Attacking wind power was not a good move, either.

[riverbendviewgal]

2. You betcha!!

[Brother Buzz]

3. Can someone explain what this Electronic Markets trader thing is

I've been seeing bits of it for some time but have no idea what it means. Is is an accurate tool or just a fun gimmick?

[freshwest]

4. +1

[cyberswede]

5. Info on Iowa Electronic Markets

Here's a description of the IEM from its website:

"The IEM is an online futures market where contract payoffs are based on real-world events such as political outcomes, companies' earnings per share (EPS), and stock price returns." (more...)

And the FAQ: http://tippie.uiowa.edu/iem/faq.html

Here's an article on the accuracy of electronic markets (emphasis added):

Prediction market accuracy in the long run

Abstract:
“Prediction markets” are designed specifically to forecast events such as elections. Though election prediction markets have been being conducted for almost twenty years, to date nearly all of the evidence on efficiency compares election eve forecasts with final pre-election polls and actual outcomes. Here, we present evidence that prediction markets outperform polls for longer horizons. We gather national polls for the 1988 through 2004 U.S. Presidential elections and ask whether either the poll or a contemporaneous Iowa Electronic Markets vote-share market prediction is closer to the eventual outcome for the two-major-party vote split. We compare market predictions to 964 polls over the five Presidential elections since 1988. The market is closer to the eventual outcome 74% of the time. Further, the market significantly outperforms the polls in every election when forecasting more than 100 days in advance.

International Journal of Forecasting, Volume 24, Issue 2, April–June 2008, Pages 285–300

http://www.sciencedirect.com/science/article/pii/S0169207008000320

Hope that helps!

[Brother Buzz]

6. Yes and no. I understand pork belly and corn futures but....

I just don't think I'm ready to make that jump to politics quite yet; way, way, way to many variables in my opinion. I'm good with using it as a research tool, but beyond that, I'm lost. The Luddite, I am.