Gruca Comments on Markets, IEM

This article examines the growing market for all-or-nothing futures, in which, through the trading of contracts, participants place odds on the chances of an event happening. The article mentions several newer markets, but notes that the IOWA ELECTRONIC MARKETS were started in 1988 by a group of University of Iowa professors. It's best known for its political futures markets, which are widely watched by Washington types and have given good reads (despite occasional attempts at manipulation by some candidates' backers) on election odds. One reason the Electronic Markets work well, explains Iowa associate professor of marketing TOM GRUCA, is that it is a cash market. "Our markets represent the best guess of informed people who are willing to back up what they think with an investment," says Gruca.