IEM Trading Heavy

Online futures traders betting that President Bush will win reelection have trimmed their wagers heading into his first debate between Bush and challenger Sen. John Kerry Thursday evening, though the markets are still leaning heavily toward the incumbent. The Iowa Electronic Markets winner-takes-all contract for a Bush victory in the presidential contest traded on Thursday to show a 68.4 percent probability of Bush prevailing, while the Kerry contract showed a 34.5 percent probability. The Bush contract had traded as high as 74.2 cents on Monday, well above the lead most polls have given the president heading into the final month of the election. Altogether, the volume in the Iowa winner-takes-all futures during September has been three times what it was in the 2000 election, said TOM RIETZ, an associate professor of finance at the University of Iowa, which runs the exchange. On Wednesday more than 20,000 Bush and Kerry contracts traded.