Iowa Electronic Markets Show Close Dem Race on Super Tuesday
The Iowa Electronic Markets are showing a tight battle for the Democratic nomination on Super Tuesday. On the Republican side, traders have all but settled on John McCain as the presumptive nominee.
In the University of Iowa business school project, traders buy and sell contracts on political candidates using their own, real money. The nomination markets are winner take all. Shares for the winner pay a dollar, and shares for other candidates are worthless.The IEM has been known for its accuracy in predicting general election outcomes, where shares pay based on the percentage of the vote.
As of 8 a.m. Tuesday, Hillary Clinton led the Democratic market with a contract price of 52 cents, which means traders think she has a 52 percent shot at the nomination. Barack Obama is trading at 46.9 cents. Withdrawn candidate John Edwards and the generic "rest of field" were less than one cent.
Clinton has led the market almost continuously since it was launched in March 2007, except for a lead-swapping few early weeks and the five days between Obama's Iowa caucus win and Clinton's New Hampshire primary victory.
John McCain has shot to a prohibitive lead since his Jan. 29 win in Florida. McCain was trading at 88.8 cents Tuesday morning, with Mitt Romney far behind at 11.7 cents. Penny gumballs were more expensive than Mike Huckabee shares. The market does not sell individual Ron Paul shares, but "rest of field" was also below one cent.