July 2 (Bloomberg) -- North Carolina Senator John Edwards is the favorite among online bettors to become Democratic presidential candidate John Kerry's running mate.
On the Dublin-based Intrade Exchange Internet betting site, bids on futures contracts give Edwards a 53.5 percent chance at being Kerry's choice for vice president. He has been at the top of bettor's lists since at least the beginning of June.
U.S. Representative Richard Gephardt of Missouri ranks second with a 10.1 percent in futures trading. New York Senator Hillary Clinton, wife of former President Bill Clinton, is in third place with a 7 percent chance on the index. Retired General Wesley Clark is given 3.1 percent odds.
Mike Knesevitch, Intrade's communications director, calls the exchange a ``24-hour public opinion poll.'' Traders put their money where their opinions are with $10 contracts that range from the Democratic running-mate choice to whether President George W. Bush, 57, will be re-elected. Bush is given a 56.2 percent chance of winning.
``I look at it every day and I probably trade about 10 times a week,'' said John Murray, 38, an independent trader who works out of his home in Morris Plains, New Jersey. ``It's something that has a big impact in the financial markets. To be able to back my opinion -- it's really unique.''
Kerry, 60, a U.S. senator from Massachusetts, hasn't publicly commented on his preferences for a running mate to face Bush and Vice President Dick Cheney on Nov. 2. The Boston Globe reported yesterday that Kerry may announce his decision as soon as Tuesday.
Under Consideration
Campaign and Democratic Party officials familiar with the process said last month Edwards, 50, Gephardt, 63, and Clark, 59, are among those under consideration. Other potential candidates are Florida Senator Bob Graham, 67, and Iowa Governor Tom Vilsack, 53, the people said.
Intrade and sites such as the Iowa Electronic Markets allow traders to bet on everything from monetary policy decisions to elections. A University of Iowa study in November 2000 found ``considerable accuracy'' for such markets.
On Intrade, a contract is worth $10 at payout. Each point is worth 10 cents. So a trader offering 50 for a contract on Edwards would make a profit of $5 if Edwards becomes Kerry's running mate or lose $5 if someone else is chosen. Because the points equal 100, the price of the contract can be viewed as the percentage odds of something happening, Knesevitch said.
Political Contracts
Intrade.com has about 33,000 members. About 10,000 people trade an average of 100,000 contracts across all of Intrade's markets every day, Knesevitch said. About a third of that is in the political contracts.
Intrade takes a 4-cent commission on each contract and requires all its members to have at least $100 in their accounts and the ability to cover all their contracts.
Dan Kincade, a 33-year-old trader in London, said he sets up a system to make educated guesses. On the Bush re-election contracts, he said he might assign a certain weight to the economy and to the chances of Osama bin Laden being caught as factors that would affect what he views as a fair price for the contract.
``You've got to essentially break it down,'' said Kincade, who traded at the Chicago Board Options Exchange. It's easiest to ``break it down into smaller, more well-defined problems.''
Murray said he's trying to ``sell into public expectations on John Edwards.'' He has worked out a model for what he thinks is a fair price for that futures contract and will sell when it goes above.
Edwards, Gephardt, and Clark lost to Kerry in the Democratic presidential primaries. Graham dropped out of the party nomination contest before the first contest.
Regional Appeal
The candidates under consideration All five have regional appeal -- Edwards and Clark in the South, Gephardt and Vilsack in the Midwest, and Graham in the battleground state of Florida -- or have positions on the war in Iraq or the economy that might attract voters.
``What you have to do is decide who can help you the most,'' said Tony Coelho, a Democrat who served as former Vice President Al Gore's campaign chairman for part of the 2000 presidential race.
Intraders gave Clinton a 12.1 percent chance yesterday, jumping from as low of 2.5 points in previous months after she was mentioned on the Drudge Report, an Internet site, as being among the top contenders.
Gephardt, now given a 10.1 percent chance of getting on the ballot with Kerry, was as high as 29 percent last month. Graham futures are trading at 2 points. Vilsack is relegated to a category of all other candidates combined.
Not on Radar
``He wasn't even on the radar'' when the running-mate contracts began trading Feb. 10, Knesevitch said. The contracts expire July 29, the last day of the Democratic convention.
The exchange also has contracts for Delaware Senator Joseph Biden (1 point), former Vice President and 2000 Democratic nominee Al Gore (1.1 point and Indiana Senator and former Governor Evan Bayh (0.3 points).
Contracts for retiring Louisiana Senator John Breaux, California Senator Dianne Feinstein, former Vermont Governor and 2004 presidential candidate Howard Dean, and West Virginia Senator Jay Rockefeller, New Mexico Governor Bill Richardson and Florida Senator Bill Nelson are all trading at 1 point or less.
The ``rest of field'' contract is selling at 2 points. The Democratic ticket will be officially ratified at the party's national convention, which begins July 26 in Boston.
``Markets are an extremely efficient method for assessing the probabilities of events occurring -- much better than polls,'' Kincade said. ``Money creates that efficiency of perspective. What happens is the smart money stays around and the dumb money has to go away.''
Bloomberg.com
On the Dublin-based Intrade Exchange Internet betting site, bids on futures contracts give Edwards a 53.5 percent chance at being Kerry's choice for vice president. He has been at the top of bettor's lists since at least the beginning of June.
U.S. Representative Richard Gephardt of Missouri ranks second with a 10.1 percent in futures trading. New York Senator Hillary Clinton, wife of former President Bill Clinton, is in third place with a 7 percent chance on the index. Retired General Wesley Clark is given 3.1 percent odds.
Mike Knesevitch, Intrade's communications director, calls the exchange a ``24-hour public opinion poll.'' Traders put their money where their opinions are with $10 contracts that range from the Democratic running-mate choice to whether President George W. Bush, 57, will be re-elected. Bush is given a 56.2 percent chance of winning.
``I look at it every day and I probably trade about 10 times a week,'' said John Murray, 38, an independent trader who works out of his home in Morris Plains, New Jersey. ``It's something that has a big impact in the financial markets. To be able to back my opinion -- it's really unique.''
Kerry, 60, a U.S. senator from Massachusetts, hasn't publicly commented on his preferences for a running mate to face Bush and Vice President Dick Cheney on Nov. 2. The Boston Globe reported yesterday that Kerry may announce his decision as soon as Tuesday.
Under Consideration
Campaign and Democratic Party officials familiar with the process said last month Edwards, 50, Gephardt, 63, and Clark, 59, are among those under consideration. Other potential candidates are Florida Senator Bob Graham, 67, and Iowa Governor Tom Vilsack, 53, the people said.
Intrade and sites such as the Iowa Electronic Markets allow traders to bet on everything from monetary policy decisions to elections. A University of Iowa study in November 2000 found ``considerable accuracy'' for such markets.
On Intrade, a contract is worth $10 at payout. Each point is worth 10 cents. So a trader offering 50 for a contract on Edwards would make a profit of $5 if Edwards becomes Kerry's running mate or lose $5 if someone else is chosen. Because the points equal 100, the price of the contract can be viewed as the percentage odds of something happening, Knesevitch said.
Political Contracts
Intrade.com has about 33,000 members. About 10,000 people trade an average of 100,000 contracts across all of Intrade's markets every day, Knesevitch said. About a third of that is in the political contracts.
Intrade takes a 4-cent commission on each contract and requires all its members to have at least $100 in their accounts and the ability to cover all their contracts.
Dan Kincade, a 33-year-old trader in London, said he sets up a system to make educated guesses. On the Bush re-election contracts, he said he might assign a certain weight to the economy and to the chances of Osama bin Laden being caught as factors that would affect what he views as a fair price for the contract.
``You've got to essentially break it down,'' said Kincade, who traded at the Chicago Board Options Exchange. It's easiest to ``break it down into smaller, more well-defined problems.''
Murray said he's trying to ``sell into public expectations on John Edwards.'' He has worked out a model for what he thinks is a fair price for that futures contract and will sell when it goes above.
Edwards, Gephardt, and Clark lost to Kerry in the Democratic presidential primaries. Graham dropped out of the party nomination contest before the first contest.
Regional Appeal
The candidates under consideration All five have regional appeal -- Edwards and Clark in the South, Gephardt and Vilsack in the Midwest, and Graham in the battleground state of Florida -- or have positions on the war in Iraq or the economy that might attract voters.
``What you have to do is decide who can help you the most,'' said Tony Coelho, a Democrat who served as former Vice President Al Gore's campaign chairman for part of the 2000 presidential race.
Intraders gave Clinton a 12.1 percent chance yesterday, jumping from as low of 2.5 points in previous months after she was mentioned on the Drudge Report, an Internet site, as being among the top contenders.
Gephardt, now given a 10.1 percent chance of getting on the ballot with Kerry, was as high as 29 percent last month. Graham futures are trading at 2 points. Vilsack is relegated to a category of all other candidates combined.
Not on Radar
``He wasn't even on the radar'' when the running-mate contracts began trading Feb. 10, Knesevitch said. The contracts expire July 29, the last day of the Democratic convention.
The exchange also has contracts for Delaware Senator Joseph Biden (1 point), former Vice President and 2000 Democratic nominee Al Gore (1.1 point and Indiana Senator and former Governor Evan Bayh (0.3 points).
Contracts for retiring Louisiana Senator John Breaux, California Senator Dianne Feinstein, former Vermont Governor and 2004 presidential candidate Howard Dean, and West Virginia Senator Jay Rockefeller, New Mexico Governor Bill Richardson and Florida Senator Bill Nelson are all trading at 1 point or less.
The ``rest of field'' contract is selling at 2 points. The Democratic ticket will be officially ratified at the party's national convention, which begins July 26 in Boston.
``Markets are an extremely efficient method for assessing the probabilities of events occurring -- much better than polls,'' Kincade said. ``Money creates that efficiency of perspective. What happens is the smart money stays around and the dumb money has to go away.''
Bloomberg.com
