The government’s bailout package is likely to pass if you believe in the new event-driven alternative futures markets. The latest active contract on intrade.com, perhaps the most liquid of the "prediction markets," is still indicating a done deal. These event driven futures work like many with a quote of 50 meaning break even odds, 0 being what it sounds like, and 100 being a prediction of 100% certainty. For the deal passage to come on or before October 31, 2008, there havebeen 6,102 contracts traded and the last trade seen was 87.0.
Today’s volume is 108 contracts. Here is a snapshot of a longer-termtrading history.
We do not put 100% faith in these markets. They are frequently accusedof being manipulated. But it is real money being bet on real issues and these havebeen used to make live trades on sporting events, elections, currentevents, weather and key geopolitical issues. There is some relevance to this.
Intrade as a prediction market also is actively used on the web. Quantcast estimates 292,500 people in the U.S. visit it per month with regular visits coming from 29% of its audience. Its total site visits are about 887,000.
Jon C. Ogg
October 2, 2008
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