Blue Dem (Clinton) has led over Red Rep (Trump) ever since the IEM (Iowa Election Market) opened. Her lead is measured by the Blue Dem price of a winner take all unit (or share), now about 93 cents. The maximum price is $1. The price must necessarily reflect the reality of the vote after the vote, because payoffs are tied to the vote. One of these two units will be worth $1 after the vote. The graph now looks like this:
The IEM has always been right about the elections of presidents. The Predictit market was wrong on Brexit, and IEM could be wrong about Clinton but the odds are against that. Predictit and British betting odds are also predicting a Clinton win.
Entrepreneurs who seek profits trade in these markets. They specialize in understanding information about voting and events that influence voting. How well today’s price of 93 cents for Blue Dem tallies with the unknown reality that will occur in several weeks depends upon the flow of information relevant to the eventual vote and the entrepreneurial interpretation of that information.
It will be a huge surprise if the Clinton share falls to 0 cents and the Trump share rises from under 8 or 9 cents to $1.
2:21 pm on October 21, 2016 Email Michael S. Rozeff
