2012-11-01

Best election trade: buy Romney at Intrade

If you are able to trade on Intrade, a good bet is to buy Romney contracts, currently trading at $3.13. They will pay $10 in the event Romney wins and expire worthless should Obama be reelected.

Based on current polling, I expect Obama could win an extremely close race, but most polling is based upon a heavy Democrat turnout. I believe that polling assumption is wrong and Republicans will turn out in higher numbers than in 2008. Depending on the strength of that turnout, I believe a Romney "landslide" is in the cards.

You can also bet on state-by-state elections. Ohio is right in line with the Presidential contract because Ohio is seen as the lynch pin of the election. There's no advantage to buying Ohio then, since it's the same payout as with Romney. However, one could speculate on Pennsylvania or Michigan (I lean towards Pennsylvania). Currently Pennsylvania is $1.68 and Michigan is $1.59.

I can't trade with Intrade due to U.S. government restrictions. If I could trade, though, I'd drop the $300+ needed to pick up 100 Romney contracts.

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