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kapilkale 528 days ago | link | parent

Tangential: If you believe in Nate Silver, Intrade is underpricing the Barack Obama contract by 20%+.

The contract that pays out $10 if Obama wins is currently trading at $6.70 per contract, implying a 67% chance Obama wins vs Nate Silver's 90%+.

Unfortunately, Intrade and American gambling regulations don't play nice so they don't accept US transactions. They also won't write you a margin account so you actually need to have funds in their system to execute a trade today.

Hard to say which party is inaccurately estimating the outcome, but given the regulatory hurdles around Intrade and the seemingly low volumes, I wouldn't be surprised if they're off.



nostromo 528 days ago | link

Intrade is just one such place to bet. See others listed here: http://www.oddschecker.com/specials/politics-and-election/us...

SkyBet and Ladbrokers for example both have payouts closer to 538's forecast.

What is peculiar is that Intrade is the outlier. In a liquid market this shouldn't happen because it allows for risk-free payouts. So something seems a bit odd about Intrade.

It's possible the campaigns have caught on to Intrade's impact on the media and will now step in when prices fall to much. </conspiracy>

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usaar333 528 days ago | link

It isn't entirely liquid. It's a pain to get money into Intrade (esp. for an American).

IEM (http://iemweb.biz.uiowa.edu/quotes/Pres12_quotes.html) and Intrade were up until yesterday off by 10%. Eventually things moved closer, but regulatory hurdles in actually getting money in (+ limits on funding) really hurt arbitrage opportunities.

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WarDekar 528 days ago | link

It's really not difficult at all to get money into Intrade as an American. I had wires show up day-of if I did it early enough or next-day in every other case.

Also of note is that other betting markets were consistently higher than Intrade was for all of the last 6 months basically- there are a lot of theories as to why this may be, but it's regularly been 5%+ lower on Obama.

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rms 528 days ago | link

It's very clearly true that one or more backers of Romney are manipulating Intrade. This makes buying Obama on Intrade a spectacular deal.

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gojomo 528 days ago | link

They don't accept US credit-card transactions. You can mail a check or make a bank wire.

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ceejayoz 528 days ago | link

I think the point was that neither of those will make it into your account in time to take advantage at this point.

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usaar333 528 days ago | link

True. Though intrade has been valuing Obama's chances 10+% lower than 538 at least since the first debate.

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kapilkale 528 days ago | link

Right- thanks for the correction.

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kapilkale 528 days ago | link

Well, that opportunity closed up fast. Contract now trading at 9.49.

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