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October 26, 2012 – Comments (1) | RELATED TICKERS: FAZ , VIIX , VXX

You can buy shares of Obama or you can short them.

Intrade now puts Obama’s chances at better than 70%

September 24, 2012, 12:37 PM

President Barack Obama is gaining enough momentum in his re-election bid to the point where self-described “prediction market” Intrade now puts his chances of winning on Nov. 6 at more than 70%.

Friday marked the first time that Intrade  put Obama’s chances of winning right at 70% in more than a year and his chances have increased slightly since then. It was the first time Obama’s probability of winning hit the 70% level since May 2011, when terrorist leader Osama bin Laden was assassinated by U.S. forces.

Intrade charts show that Obama’s chances have steadily improved since the Democratic National Convention was held in Charlotte, N.C., and a series of perceived missteps by his challenger, Republican Mitt Romney. Last week it was revealed that Romney told a gathering of donors that he believed 47% of the country pays no income taxes and believes they feel “entitled” to aid from the rest of the nation. The controversial remarks, surreptitously taped, were accompanied by a number of other statements that could thwart the former Massachusetts governor’s chances.

Intrade is pricing “shares” that predict an Obama victory at $7.13 apiece, while shorts on such an event are going for $7.02. At last check, there were more than double the number of short shares compared with buy shares for an Obama victory.

There are other signs the president is picking up steam. RealClearPolitics.com is now giving Obama 3.7-point edge over Romney 48.6% to 44.9%, in its average of polls, and the incumbent is starting to push his gains outside the margin of error — or is already there, depending on how high the bar is set. Some polls put margins of error at 3 points or less while others put it at 4.

Still, if the margin of error is raised to 4 points, Obama supporters have another reason to rejoice — at least at this stage in the election process. The RealClearPolitics average of polls for Ohio and Virginia give the president a 4.1% and 4.5% margin of victory, respectively, in those two battleground states. And those, coupled with the series of states that Obama is expected to win, give him enough electoral votes to secure victory in November.

 

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1 Comments – Post Your Own

#1) On October 26, 2012 at 12:01 PM, Melaschasm (56.32) wrote:

If I were a betting man I would have shorted Obama last month.  Obama's reelection chances have been near 50% all year.  When the odds makers are giving high odds of an Obama victory, betting against Obama should be a profitable position.  Unfortunately this is a one time bet.  There are not a bunch of similar situations to spread out the risk of losing.  

In Texas Hold'em tournament terms, shorting Obama is like calling all in with a nut flush draw after the flop.  You have about a 50/50 chance to win, and with some of your money already in the pot the call is profitable in the long run.  However, this means you have a 50/50 chance of being knocked out of the tournament, so if you are confident you can outplay the other people, you should usually fold.

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