Get yer polls, bets, numbers & pretty graphs! Elections 2008

Trader Drove Up Price of McCain ‘Stock’ in Online Market
By Josh Rogin, CQ Staff

An internal investigation by the popular online market Intrade has revealed that an investor has been attempting to artificially boost the prediction that Sen. John McCain will become president.

Over the past several weeks, the investor has pushed hundreds of thousands of dollars into Intrade’s predictive market for the presidential election, the company said, resulting in great financial losses through a strategy that belies any financial motive.

“The trading that caused the unusual price movements and discrepancies was principally due to a single ‘institutional’ member on Intrade,” said the company’s chief executive, John Delaney, in a statement released Thursday. “We have been in contact with the firm on a number of occasions. I have spoken to those involved personally.”

After an extensive investigation into the suspicious trading patterns, Intrade found no wrongdoing or violation of its exchange rules, the company said.

The company claims and experts confirm that the Intrade market is generally more accurate in predicting outcomes of major events than other leading indicators, such as polls.

According to Intrade bulletin boards and market histories, soon after the mystery investor would act, smaller investors would sweep in to take advantage of what they saw as a price discrepancy " quickly returning the Obama and McCain futures prices back to their regular market value.

This resulted in huge losses for the investor, which users dubbed the “rogue trader,” and what amounted to effortless profits for the small investors who followed the patterns to take maximum advantage.

But unless there is some scheme to get others to purchase it at the artificially inflated price, there can be no profit to such a strategy. If there is such a moron, and I tend to doubt it, all he is doing is giving away his money to get an exceedingly temporary better view. By creating an artificial number; he would be simultaneously creating a vacuum to equalize it. Not terribly likely.

Much more likely: Some person or persons continues to like the presumed opportunities at Intrade and is wagering accordingly. They’ll be proven right or wrong on election day when the contracts all expire. Anyone who thinks the “line” is artificially high or low should simply take advantage of their perceived greater wisdom.

The conspiracy implications just struck me as nutty to mention, as they are wholly unsupported by the information provided.

Geez, Do I Have to Add 'Em All Up?

Rep. Tim Mahoney (D-FL), responding to the question of how many affairs he's had: "You're asking me over a lifetime? I'm just saying I've been unfaithful and I'm sorry for that."

--David Kurtz

Your new story pretty much confirms my every prediction of what would happen in the unlikely event some moron personally funded such a stupid scheme.

OCCOM BILL wrote:

Your new story pretty much confirms my every prediction of what would happen in the unlikely event some moron personally funded such a stupid scheme.

Yeah but it pretty much put the cahoots on your brusque dismissal of Cyclo's suggestion that someone might be gaming the system as a nutty conspiracy theory...

I don't think this is any cause for alarm... if Joe Biden contracts were being bought up as part of this scheme, that might be more concerning, but they aren't. Still, if I were the Secret Service FBI (**), I would probably want to know the identity of this trader. And if I were one of those Beltway pundits who thinks I can be hip by referring to Intrade, I would take a look at the gross inefficiencies in these markets and think better of it.


(**) It seems to me that too much attention is being paid to this particular point. No, I do not think it is at all probable that this is connected to some sort of physical threat to Obama. But I do think it is the job of the FBI to investigate improbable threats. This is the whole reason the Pentagon was arguing for terrorism futures markets a couple of years ago.

And if I were one of those Beltway pundits who thinks I can be hip by referring to Intrade, I would take a look at the gross inefficiencies in these markets and think better of it.


(**) It seems to me that too much attention is being paid to this particular point.