TURNING POINT: BARACK OBAMA EVENT DERIVATIVE NOW AHEAD FOR BOTH DEMOCRATIC NOMINATION AND NOVEMBER’S ELECTION.

Chris F. Masse February 7th, 2008

LIKE HIM OR NOT, THIS IS THE 44th US PRESIDENT, ACCORDING TO THE PREDICTION MARKETS. GET USED TO IT.

Barack Obama will get the Democratic Nomination: 59%

Barack Obama will be the Next US president: 36% (above both John McCain and Hillary Clinton)

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ABOUT PREDICTION MARKETS

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Prediction markets produce dynamic, objective probabilistic predictions on the outcomes of future events by aggregating disparate pieces of information that traders bring when they agree on prices. Prediction markets are meta forecasting tools that feed on the advanced indicators (i.e., the primary sources of information). Garbage in, garbage out… Intelligence in, intelligence out…

A prediction market is a market for a contract that yields payments based on the outcome of a partially uncertain future event, such as an election. A contract pays $100 only if candidate X wins the election, and $0 otherwise. When the market price of an X contract is $60, the prediction market believes that candidate X has a 60% chance of winning the election. The price of this event derivative can be interpreted as the objective probability of the future outcome (i.e., its most statistically accurate forecast). A 60% probability means that, in a series of events each with a 60% probability, then 6 times out of 10, the favored outcome will occur; and 4 times out of 10, the unfavored outcome will occur.

Each prediction exchange organizes its own set of real-money and/or play-money markets, using either a CDA or a MSR mechanism.

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2008 US PRESIDENTIAL ELECTIONS

Technical Note: Put your mouse on your selected chart, right-click, and open the link in another browser tab, which will open a prediction market page on your favorite exchange.)

Source: Dynamic, compound prediction market charts from InTrade

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Source: BetFair Politics Zone

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Source: NewsFutures widget

NewsFutures: Next US President Will Be Democratic.

Barack Obama Democratic Nomination event derivative at NewsFutures

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UNLIKE OVERCOMING BIAS, FREAKONOMICS, AND MARGINAL REVOLUTION, WHICH ARE “BIASED” TOWARDS INTRADE, MIDAS ORACLE IS THE ONLY MULTI-EXCHANGE BLOG REPORTING ON PREDICTION MARKETS. AND WE TAKE GREAT PRIDE OF THAT.

MIDAS ORACLE = THE PREDICTION MARKETS, AS THEY “SHOULD BE”