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New Market: Exact Number of Electoral College Votes Won

Wednesday, Apr 18, 2012

Intrade has opened markets for the exact number of Electoral Collge votes that will be won by the Democratic and Republican nominees, plus any Third Party or Idependent candidates. These markets can be found under Politics > 2012 US Election > Exact number of Electoral College votes won.

Important:

These markets are not typical Intrade markets that will settle at $10.00 or $0.00 depending on the outcome of the underlying event. Please read the following market rules very carefully and make sure you understand how these markets work before you enter any orders to buy or sell shares. Trades will not be reversed based on a misunderstanding of the market rules. If you have any questions about this market please contact help@intrade.com.

How This Market Works:

Each market will be settled according to how many Electoral College votes the candidate wins. Each Electoral College vote is valued at $0.01. Therefore, the number of votes won by the candidate will be multiplied by $0.01 to determine the final settlement price of the market. For example: If the candidate wins 332 Electoral College votes the market will be settled at $3.32 (332 votes * $0.01).

When trading shares the number of Electoral College votes is multiplied by $0.01 to determine the price of the shares. A share price of $2.85 for example represents 285 Electoral College votes (285 votes * $0.01).

The maximum number of Electoral College votes is 538 so therefore the highest share price is $5.38. The minimum number of Electoral College votes is 0 so therefore the lowest share price is $0.00. Your potential profit and loss will be calculated using these minimum and maximum prices (in the same way it is calculated for the typical Intrade markets that settle at either $0.00 or $10.00).

Buying Shares:

You will buy shares if you expect the number of Electoral College votes won will be HIGHER than the current share price. If the number of votes won is higher than your share price you will make a profit. If the number of votes won is lower than your share price you will suffer a loss. For example:

  • You buy shares at $2.75 (275 Electoral College votes). The candidate wins 320 Electoral College votes and the market is settled at $3.20. Your profit will be $0.45 per share.
  • You buy shares at $2.75 (275 Electoral College votes). The candidate wins 150 Electoral College votes and the market is settled at $1.50. Your loss will be $1.25 per share.

(Short) Selling Shares:

You will sell shares if you expect the number of Electoral College votes won will be LOWER than the current share price. If the number of votes won is lower than your share price you will make a profit. If the number of votes won is higher than your share price you will suffer a loss. For example:

  • You sell shares at $3.10 (310 Electoral College votes). The candidate wins 240 Electoral College votes and the market is settled at $2.40. Your profit will be $0.70 per share.
  • You sell shares at $3.10 (310 Electoral College votes). The candidate wins 355 Electoral College votes and the market is settled at $3.55. Your loss will be $0.45 per share.

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