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On Day of the First Debate, IEM Traders Still Make Obama the Favorite

On what may or may not be the day of the first presidential debate, traders on the University of Iowa's Iowa Electronic Markets continue to make Democratic candidate Barack Obama the favorite to win the popular vote in November.

As of 9 a.m. Friday CST, the price of an Obama contract on the IEM's Winnner Take All Market was 63.7 cents, which means traders believe he has a 63.7 percent probability of winning the popular vote.

A contract for Republican candidate John McCain, meanwhile, was selling for 37 cents.

McCain and Obama were supposed to engage in the first of their three debates this evening, but McCain has asked that it be postponed so the candidates can focus on legislation to help the ailing economy. Obama has turned down the suggestion, and as of mid-morning, there was still uncertainty as to whether it would be held.

The 60-40 price split between the two has largely been in place since Obama secured the Democratic Party's nomination in May. Trading has been moderate on the market in recent days, with 5,000 contracts trading hands Wednesday and almost 4,000 on Thursday.

Meanwhile, on the IEM's presidential Vote Share Market, a contract for Obama is selling for 53.4 cents, which means traders believe he will receive 53.4 percent of the two-party popular vote in November. A contract for McCain on the Vote Share market was selling for 47 cents.

The Iowa Electronic Markets is operated by the University of Iowa's Tippie College of Business as a real-money futures prediction market. Begun in 1988, the IEM is a research and teaching tool that has achieved an impressive prediction record, substantially superior to alternative mechanisms such as opinion polls. Such markets have been significantly more accurate than traditional tools in predicting outcomes ranging from political election results to movie box office receipts.

The IEM can be found online at tippie.uiowa.edu/iem.

The latest presidential market price quotes can be found at iemweb.biz.uiowa.edu/quotes/Pres08_quotes.html.


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