A prediction market is a market where users trade on the outcomes of future events. One of the side benefits of the market is that it produces highly accurate forecasts that have been proven to be better than the polls.

Since the two party candidates were selected, Hubdub has had a market on who will be the eventual winner of the 2008 Presidential Election. Over the past couple of months we’ve noticed an interesting correlation between the McCain’s price (which is his % likelihood of being elected) and the S&P500:

As I write this the S&P 500 has dropped 42% from its historic high and is trading at 907.84. McCain’s likelihood of being the next president is currently trading at 14%. Voters have made it clear they have more faith in Obama in handling the economy and unless there is a dramatic and unprecedented economic improvement, November 4th will be the closing bell on McCain’s presidential ambitions.

Popularity: 10% [?]

Tags: Barack Obama, election, John McCain, politics, United States presidential election 2008

This entry was posted on Wednesday, October 15th, 2008 at 9:36 pm and is filed under politics. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.