Email | Print    Type Size  -  +

Traders confident in bailout's passage's prediction market is heavily weighted towards success for the second attempt at a Wall Street bailout bill.

By Mina Kimes, reporter
Last Updated: October 3, 2008: 11:40 AM ET

NEW YORK (Fortune) -- When the House axed a proposed $700 billion bailout of financial institutions on Sept. 29th, many investors panicked. But traders on an online prediction market run by saw some hope, placing the odds of an October passage for the bailout at 80% the next morning. That hope has grown since the Senate passed the bill on Oct 1: With only hours to go before a vote, the site's pickers believe there's a 94% chance that the measure will pass., which is based on in Dublin, creates online prediction markets for political, economic and cultural events. Activity at the site shoots up in election periods, but interest in contracts on events affecting the financial markets, such as the bailout's passage, has also soared in recent weeks, says spokesman Chad Rigetti. "Markets that are at the intersection of politics and finance are a huge hit now," he says.

According to Rigetti, $300,000 changed hands in the market for a September bailout passage, which opened on Sept. 23. Since the October contract opened, $60,000 has already been traded.

Rigetti says there's an increased interest in the site's Dow Jones Index market, where traders try to guess how high the index will close. One reason for the attention: "Even though there's a short selling ban, you can still short the Dow on Intrade," he says.

While Intrade has had success in predicting presidential and congressional contests, its political-economic markets have been volatile. The September bailout contract, for example, closed on 63% the day before the bill's failure.

Rigetti points out that those odds aren't bad, since many people were surprised by the news. But, considering that more than twice as many visitors last month came from New York instead of the D.C. area, it's likely that more Intraders are getting their bailout tips from political blogs rather than Hill insiders.

The site is still viewed as a bellwether by many, prompting a satirical treatment from a blogger at liberal news site Daily Kos, who wrote that the newest Intrade market was on an Intrade bailout. Unfortunately, only 6% of the fifteen people who voted supported that rescue. To top of page

Company Price Change % Change
Bank of America Corp... 16.15 0.00 0.00%
Facebook Inc 58.94 0.00 0.00%
General Electric Co 26.56 0.00 0.00%
Cisco Systems Inc 23.21 0.00 0.00%
Micron Technology In... 23.91 0.00 0.00%
Data as of Apr 17
Index Last Change % Change
Dow 16,408.54 -16.31 -0.10%
Nasdaq 4,095.52 9.29 0.23%
S&P 500 1,864.85 2.54 0.14%
Treasuries 2.72 0.08 3.19%
Data as of 7:36pm ET
More Galleries
50 years of the Ford Mustang Take a drive down memory lane with our favorite photos of the car through the years. More
Cool cars from the New York Auto Show These are some of the most interesting new models and concept vehicles from the Big Apple's car show. More
8 CEOs who took a pay cut in 2013 Median CEO pay inched up 9% in 2013 to $13.9 million. But not everyone got a bump last year. Here are eight CEOs who missed out. More
Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.