Futures markets for political events are often challenged as far as the reality versus the pricing because they are based on live real money bets rather than on true sentiment. They also have been criticized over their validity. After all, it takes real money to move the needle either way, and many people do not know how to put real money to work in new markets like this. Still, here is what the Intrade.com market values have indicated after Wednesday's presidential debate between Barack Obama and Mitt Romney.
Mr. Romney has recaptured much lost ground after his "47% leaked news" hurt his ratings. Intrade is still showing only a 34.5% change that Romney wins and shows a 65.4% chance that Obama wins. What did occur is that the value of the Obama Gets Re-elected contract is down 2.2% to $6.54 and the contract for a Romney victory rose by 3.3% to $3.45 after the debate.
The event-based futures markets have been accused of being manipulated before. We have shown the two charts below from Intrade to show what has happened in these markets. Again, we will leave it up to you to determine just how valid these markets are.
We also have a poll at the end of this for our readers to take. Tell us which candidate you think won the first presidential debate.
JON C. OGG
Filed under: 24/7 Wall St. Wire, Politics