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October 15, 2008

Intrade — Make Money On Barr’08

by Brad Warbiany

Last night, I posted about the wild swings seen on the Intrade prediction market for President; wilder than anything I saw in ’04. I wanted to see how a true “long shot” was looking, so I started looking up contracts on Barr.

Barr has several contracts based on his percentage in the popular vote, and a contract on whether or not he will receive any electoral votes. There may be options to take advantage of these contracts.

The contract trading whether he will receive >2% of the popular vote is trading at about 19, which mathematically makes it about a 4:1 bet if you want to hold it until election day. The contract trading whether he will receive >3% of the popular vote is currently trading at 4. Mathematically, that’s a 24:1 bet.

I’m actually considering getting on there and laying $100 on each contract, buying 5 shares of the 2% and 25 shares of the 3% contract. Assuming that Barr makes it above 2% but not 3%, I’d walk away with $500 for a $300 profit. If he were to pass 3%, I’d walk away with $3000 for a $2800 profit.

Given that this election seems to be running away from McCain, I think there’s a good chance that the “protest vote” will be out in more force than usual. Granted, the Libertarian party candidate hasn’t earned over 1% of the popular vote nationwide in recent history, but there’s a first time for everything, right?

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2 Comments

  1. How might one purchase said futures contract? My bank won’t permit funds transfers of this kind. (It’s probably illegal under the Online Gambling Ban.)

    Comment by thomasblair — October 15, 2008 @ 9:51 am
  2. I found this:

    Information on funds transfer

    You can use a credit card if no other options are available. I think some of my online poker friends have used FirePay successfully with a bank account.

    Of course, I wouldn’t want to counsel you to do anything illegal ;-)

    Comment by Brad Warbiany — October 15, 2008 @ 10:53 am

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