B* dropping like a rock on Tradesports

[JPJones]

About to drop below 50, meaning Kerry is favored to win.

Anyone know why there was such a big drop in the last 24 hours? People who bet on these things usually have good sources.

[Tandalayo_Scheisskopf]

1. Welcome to The Tipping Point.

In societies, change happens in exponential ways. With the maladministration lacking in impulse control or insight, they have pushed this process hard. Not one thing is the cause, it is the totality of their actions, coupled with a growth of nagging doubts that have existed since day one.

Yes, it can be said that Mr. Moore has contributed. But he has not created: He has buttressed the doubts that were already growing.

[JPJones]

3. More than that

This isn't an opinion poll. Look at the line straight down at the end. I think somebody knows that there is some shit going down.

[oasis]

2. Even with a parachute, Dumbya is in for a rough landing.

[swag]

4. John Poindexter is probably shorting the Bush contract

He knows his shit.

[Doosh]

5. something happened in iraq

something big, hasn't hit the major news outlets yet as they're busy tidying up the story, but such a drastic drop so quickly is unusual.

[Lex]

6. Okay. I'm out of the loop on this. What's "Tradesports?"

Thanks!

[charlyvi]

7. Thanks Lex

I was just thinking that myself---What the Cheney is "Tradesports?"

[belle]

9. What they asked.

[yowzayowzayowza]

10. Looks like:

http://tradesports.com/

[JPJones]

11. Tradesports is a web site that enables futures trading

between individuals (i.e. gambling, but without a bookmaker). Propositions are put up on the web site, such as Bush will win in Nov. or the Lakers will win a certain game. Then people can propose a price for a contract that expires when Bush or the Lakers win or lose the election/game in question. If you bought a contract and the proposition is true, you win. If you sold a contract and the proposition is false, you win. There is no bookmaker because each contract is traded between two individuals.

The contracts are worth $10, but are valued on a scale of 0 to 100. If you buy a Bush wins in Nov. for 50, it costs you $5. That $5 goes to the person who sold you the contract. If Bush wins, you get $10 from the person who sold you the contract, if Bush loses, the person who sold you the contract gets to keep the $5. But the price of the contract is determined by what people are willing to pay, so it fluctuates. If an event is seen as likely, the price moves closer to 100, if it is unlikely, the price moves closer to zero. Notice that there is no 'Kerry wins' proposition, if you think Bush will win, you buy contracts, if you think Kerry will win, you sell contracts.

This is exactly how the NASDAQ operates. So, the people on the site tend to involved in financial services (because it's a little hard to understand at first). They also tend to be conservative. If the Bush wins goes below 50, that means that there are enough people who really believe he is going to lose that they risk losing more money than they stand to gain.

It's better than an opinion poll, because people put up real money. Also, insider trading is not illegal. If you know something secret, you can make a lot of money.

Also note that even though it doesn't settle up until Nov., imagine if you sell Bush at 50, he drops to 25, so then you buy at 25, you have locked in a profit of $2.50 per contract minus commisions.

[Lefty Pragmatist]

8. If I'm reading that correctly

then it put odds of Bush re-election at:

65% 2003/01
70% 2003/07
75% 2004/01
50% 2004/07

which is about what I'd have expected. Bush's odds would tend to be artifically high during the war fever and before the Dem nominee was named. The real downturn was 2004/02 through 2004/06, the interval during which Kerry wrapped up the nomination and had nearly unchallenged and positive media coverage.

We'll see how it trends. I agree that the best place to look for sincere rather than Freeped (or DUed) results is where people actually put their betting dollar -- serious wagers are non-partisan. But remember, if Bush is getting 2:1 odds that means it's a dead heat. It hardly matters if Bush falls 34 percentage points from a high if he still wins by 1 in November.

Keep working.

[Shrek]

12. This chart makes an interesting point

Note that predictions for a Bush win seemingly track with the S&P 500 index. If this chart holds true, Bush will need a major rally to get any kind of traction.

[JPJones]

13. How did you make that chart? n/t

[JPJones]

14. The alternative explanation is the Wall Street is reacting to the election

For some reason, Wall Street thinks Republicans are good for them. Hello, remember the 1990's? You can thank Bill Clinton's balanced budgets for that, I believe.

I only wish Kerry would come out as a deficit hawk.