Intrade 2008.PRES.McCAIN > PRESIDENT.REP2008

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How frequent are arbitrage opportunities such as the following?

In addition to title, the reverse is true of OBAMA/DEM.

Do traders really think there&#8217-s some probability of McCain being elected as an idependent and Obama being replaced as the Democrat nominee?

Quit mulling over the VP-choice prediction markets, todays real story is in the election winner markets.

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I would suggest that the VP selections and the performance of the VP-choice markets at InTrade and elsewhere lend some validity to Chris Masse&#8217-s views on such markets. But enough about the VP markets, already. The interesting developments are in the election-winner markets.

Price for 2008 Republican VP Nominee (others upon request)(expired at convention) at

Since just after 2 PM Irish time, when the NEW.REP.VP.PALIN contract briefly fell into the 20s (rumors had it that Palin wasn&#8217-t on a plane to Dayton- subsequently established that the rumor was not true), the contract turned sharply up to about 98 and stayed there until the selection was made official.

During that same time period, the &#8220-Obama wins&#8221- contract has slipped down a few percentages and the &#8220-McCain wins&#8221- contract is up a few percentages. Since at most VP selections are typically expected to affect final vote totals by 2 or 3 percent, the fact that the Obama and McCain contracts (which are winner-take-all, not vote-share contracts) have moved by 2 or 3 percent themselves suggests the markets think Palin is a fairly strong choice.

(But as I write this, the Obama contract is rallying back. Live blogging the prediction markets is hazardous stuff.)

Price for 2008 Presidential Election Winner (Individual) at

Price for 2008 Presidential Election Winner (Individual) at

UPDATE: As of Tuesday morning, both presidential markets have slid back to their pre-Palin-announcement levels, but active trading suggests continued disagreement about the information trickling into the market. Also interesting, activity has continued on the NEW-REP-VP-PALIN contract, with the price dipping below 95 (but back to 97 as I write).  Since that contract expires at the convention – i.e. in a day or two – some folks are betting Palin will be off the ticket fast.