News & Events

Obama Price Little Changed on IEM Following Democratic Convention

Barack Obama's price on the University of Iowa's Iowa Electronic Markets is barely moved Friday following this week's Democratic National Convention, with traders still making him the favorite to win the popular vote in November.

As of 9 a.m. Friday CT, the price of an Obama contract was trading at 63 cents on the IEM's Winner Take All market, little changed from the 60 cents he was trading at when the convention started on Monday.

The 63 cent price means traders believe there is a 63 percent probability he will win the popular vote count.

A McCain contract, meanwhile, was trading at 40.2 cents Friday morning, which means traders believe there is a 40.2 percent probability that he will win the popular vote.

The lack of a "convention bounce" on the market for Obama is not unusual. While candidates generally see their numbers increase in public opinion polls following their parties' convention, they historically have seen little if any bounce on the IEM.

Obama's price even had a couple of dips during the Democrats' four days in Denver, dropping to as low as 54 cents on Tuesday and 58 cents following his acceptance speech Thursday, before rallying overnight.

More than 12,800 contracts were traded on the Winner Take All market during the convention.

The IEM is a real-money futures market in which traders can invest up to $500 to buy and sell contracts based on which candidate they think will win. Opened in 1988, the IEM is a research and teaching tool operated by professors at the University of Iowa's Tippie College of Business that examines how markets operate and seeks to understand their value as a predictive tool.

The IEM has operated markets in every presidential election since 1988 and a study earlier this year showed it to be more successful at predicting winners than 74 percent of the public opinion polls conducted during that time.

On the IEM's Vote Share market, an Obama contract was trading for 52.5 cents Friday morning, which means traders believe he will receive 52.5 percent of the popular vote between the two parties.

A McCain contract was trading for 49.5 cents on the Vote Share market.

Meanwhile, the IEM's Democratic nomination market was closed Thursday, Aug. 28, following Obama's formal nomination by the party. Contracts for Obama paid $1, while contracts for Hillary Clinton, John Edwards and Rest of Field paid zero.

To access the IEM go to tippie.uiowa.edu/iem.


Return to top of page