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CNBC Features Intrade - Cashing in on the election

Monday, Aug 25, 2008

"It's your money, your vote and... your trade," CNBC's Scott Cohn takes a look at Intrade's, real money, prediction markets that "some political experts swear by."

The CNBC feature, aired on Monday 25th August 2008, discusses Intrade's ability to predict the outcome of the 2008 election.

"Trading volumes are five times higher this 2008 cycle, to-date, than for all of 2004" according to Intrade CEO, John Delaney. Justin Wolfers, of the Wharton School of Business (University of Pennsylvania), comments that small markets "end up yielding very accurate predictions."

The Wharton School of Business has found that Intrade has a margin of error of 1-1.5%. This margin of error is approximately half that of comparable Gallup Polls which has been a benchmark of accuracy in predicting the outcome of US presidential elections for many years.

Can the Intrade crowd predict the election? Some say volumes are too small, others say it predicted 50 states correctly in 2004 and with over $100m traded on US Politics this election cycle so far "maybe, these virtual crowds really are wise."

Absolute accuracy aside, Intrade seems to predict better than many others and gives a real-time snapshot of market sentiment 24/7.

To view Intrade on CNBC's Squawk Box, please click the link below:

Intrade on CNBC's Squawk Box

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