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Friday, October 5, 2012
The results are in...
Mitt Romney won the first debate. He performed so well, in fact, his chances of winning the main event jumped by 30%. That's good news for Romney supporters.
But President Obama's odds of victory are still 66%...
I didn't get these numbers from a polling service. Nor did they come from the political analysts at FOX News, CNN, or any of the major television networks. These numbers came from Intrade – the world's leading prediction market.
A prediction market works like a stock market. But instead of buyers and sellers coming together to determine the appropriate price of a stock, Intrade customers help determine the probability of something happening.
Traders can make predictions on business events. They can trade on climate and weather. They can predict entertainment news... like if the new Tim Burton movie Frankenweenie will gross more than $20 million during its opening weekend (currently an even-money bet).
And of course, they can make predictions on the presidential election.
Prior to Wednesday night's debate, traders at Intrade were giving Obama a 74% chance at reelection. Romney's chances to become leader of the free world were just 26%. Following the debate, though, those numbers changed to 66% versus 34% in favor of Obama.
According to the clients of Intrade, Romney clearly won the debate... but Obama is still going to win the election.
You can scoff at those numbers if you like. But lots of folks on Wall Street pay close attention to what's going on in prediction markets like Intrade.
These markets are more than just a source of entertainment. They help traders determine the probability of events as mundane as whether the Dow Jones Industrial Average will close up or down on any given day or which actor will win an Academy Award... to more important items like which country will be the first to drop out of the European Union.
And of course, they help traders determine who is most likely to be president.
You can check it out at www.intrade.com.
Best regards and good trading,
Tom Dyson, one of the original editors of DailyWealth, was a gambling aficionado. He told a few good stories about bets he's made and heard about. Find one here: Betting On The River Of No Return.
And see Tom's take on why Wall Street isn't so different from Vegas... and how to play the odds here: Beating The Street And The Strip.
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