Thursday, June 05, 2008

Obama Leading McCain in Iowa Electronic Markets

Obama Leading McCain in Iowa Electronic Markets

Presumptive Democratic nominee Barack Obama is widely favored to defeat John McCain by traders in the Iowa Electronic Markets (IEM), but the folks voting with their dollars expect the margin itself to be narrower.

The University of Iowa College of Business project, in which traders use real money to measure candidates' chances, has had a strong predictive track record since it started in 1988.

The IEM has two general election markets: a winner-take-all market and a percentage market. The winner-take-all market predicts odds of victory.

Obama leads this market at 61.9 cents. That means traders give him a 62 percent chance of winning.

The vote share market predicts the margin of victory, and pays out based on that percentage; a 55 percent share yields 55 cents. Volume so far is low, but Obama was trading at 52.7 cents, predicting a 53 percent share of the popular vote.

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