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Traders bet on Obama, Huckabee
02/01/2008 22:37 - (SA)
Washington - On the eve of the first
nominating contest of the 2008 US presidential race, traders
on the political prediction markets were betting on Thursday on
victories in Iowa by Illinois Senator Barack Obama and former
Arkansas Governor Mike Huckabee.
Obama, seeking to become the first black US president,
was seen by the traders as the likely Democratic winner, with a
46.2% chance, compared with a 32.9% chance for
former first lady Hillary Clinton, midday trading on the
Intrade futures exchange showed. Former North Carolina Sen.
John Edwards trailed at 21%.
Huckabee, a former Baptist preacher who appeals to Iowa's
social conservatives, led the Republicans with 70%,
compared with former Massachusetts Governor Mitt Romney at 35.1%, Intrade trading showed.
Traders on the Dublin-based Intrade prediction market can
buy and sell contracts based on which party they expect to win
the US election and which candidates they expect to win or
lose the various state nominating contests.
Contracts are structured so that prices can be read as the
percentage likelihood of the candidate winning the race. So
traders buying and selling Huckabee contracts at 70 believe he
has a 70% chance of winning.
Political markets
Researchers involved in the Iowa Electronic Markets, a non-profit real-money exchange run by professors at the
University of Iowa, have found that political markets often forecast election results better than polls.
The Iowa market only offers contracts on which party is
likely to win the US general election and which candidates
are likely to win the Republican and Democratic nominations.
Traders on both exchanges were forecasting a Democratic
victory in the general election in November.
On the Iowa exchange, traders were betting Clinton had the
best chance - 61.5% - of winning the Democratic
nomination. Obama trailed at 25.8% and Edwards followed
at 12.4%, trading showed.
Romney was predicted to have a 31% chance of winning
the Republican nomination, followed by Arizona Senator John McCain
at 26.3% and former New York Mayor Rudy Giuliani at 21%, trading showed. Huckabee was seen as a long shot at
12.8%.
Turmoil
But Intrade traders were in turmoil over the ultimate
Republican nominee, with Giuliani seen as having a 27.2%
chance, versus 24% for Romney and 22.3% for
McCain.
Clinton was viewed as the likely Democratic nominee, with a
64.7% chance, versus Obama at 26.1%.
The projections were a shift from late October, when
Giuliani was seen as the likely Republican winner and Clinton a
virtual shoo-in with a 70% shot at victory.
Traders on Intrade were predicting Clinton would win the
New Hampshire primary on January 8, giving her a 60% chance
versus 42.4% for Obama and 2.1% for Edwards.
McCain led the Republican field in New Hampshire, with
traders giving him a 59.9% chance of victory, versus
36.9% for Romney and 2% for Huckabee.
- Reuters
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