Email | Print    Type Size  -  +

Traders confident in bailout's passage

Intrade.com'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 Intrade.com 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.

Intrade.com, 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
Ford Motor Co 8.29 0.05 0.61%
Advanced Micro Devic... 54.59 0.70 1.30%
Cisco Systems Inc 47.49 -2.44 -4.89%
General Electric Co 13.00 -0.16 -1.22%
Kraft Heinz Co 27.84 -2.20 -7.32%
Data as of 2:44pm ET
Index Last Change % Change
Dow 29,969.52 85.73 0.29%
Nasdaq 12,377.18 27.82 0.23%
S&P 500 3,666.72 -2.29 -0.06%
Treasuries .92 -0.03 -2.95%
Data as of 4:44am ET
More Galleries
10 of the most luxurious airline amenity kits When it comes to in-flight pampering, the amenity kits offered by these 10 airlines are the ultimate in luxury More
7 startups that want to improve your mental health From a text therapy platform to apps that push you reminders to breathe, these self-care startups offer help on a daily basis or in times of need. More
5 radical technologies that will change how you get to work From Uber's flying cars to the Hyperloop, these are some of the neatest transportation concepts in the works today. More
Sponsors

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.