October 12, 2011 | By UI News Services
Mitt Romney solidified his position as the most likely Republican presidential nominee on the Iowa Electronic Markets after Tuesday's debate in New Hampshire.
Romney's contracts were trading for 69.8 cents on the IEM's GOP nomination market Wednesday morning, which means IEM traders believe he has a 69.8 percent probability of winning the Republican nomination. Earlier Wednesday, before the debate, Romney's contract was trading for about 66 cents.
Rick Perry's contract, meanwhile, dropped from 15.5 cents Tuesday to 12.5 cents Wednesday morning, which means traders believe there is a 12.5 percent probability that Perry will win the nomination. Michele Bachmann was trading at 2.8 cents and Ron Paul at 1 cent.
The market's Rest of Field contract, which includes any other candidate, was trading at 15.8 cents, which means traders believe there is a 15.8 percent probability that someone other than Romney, Perry, Bachmann or Paul will be the party's nominee.
A real money futures market operated by the University of Iowa's Tippie College of Business, the IEM gives traders from around the world the opportunity to buy and sell contracts based on what they think the outcome of a future event will be. Contracts for the correct outcome pay off at $1, all other contracts pay off at zero. As a result, the price of the contract at any given time is the probability that the traders believe that event will happen. Traders can invest up to $500 in the market.
The latest prices on the GOP Convention market are available online at iemweb.biz.uiowa.edu/quotes/356.html. The latest Iowa Caucus market quotes are available at iemweb.biz.uiowa.edu/quotes/355.html.
More information on the IEM is available at tippie.uiowa.edu/iem/markets.
Contact: Tom Snee, UI News Services, 319-384-0010