We’ve bet that Hillary Clinton will win
PUTTING OUR MONEY WHERE OUR MOUTH IS
Click to enlarge
Some experts seem pretty sure Donald Trump will be the next US President. Michael Moore wrote an article entitled 5 Reasons Why Trump Will Win.
Prediction maven Nate Silver has warned a few days ago “Don’t think people are really grasping how plausible it is that Trump could become president. It’s a close election right now.”
Despite this, we think that Hillary Clinton is going to win.
And we’ve put our money where our mouth is. There’s a prediction market called PredictIt in which US citizens in most states can legally bet on events happening or not. There’s an $850 limit on any contract, but you can get around that, in the following way.
As the figure up top shows, we’ve placed two bets:
- We bet $799.50 that the next President will not be a Republican. That is, we bought 1250 shares of “no” on that contract at 65 cents each. If the next President is indeed not a Republican, we’ll be able to sell those shares for a dollar each, or $1230. Otherwise we lose our money.
- We bet $849.87 that Hillary Clinton will be the next President. That is, we bought 1349 shares of “yes” on that contract at 63 cents. If Hillary wins, we’ll be able to sell our shares for $1349. Otherwise we lose our money.
So, we’ve bet $1,649.37. If Hillary wins, we’ll have $2,579 (minus the market’s 10% fee on profits). If Trump or some other Republican wins, we’ll have bupkis.
On the other hand, a different prediction market, the oldest and most venerable — the Iowa Electronic Market — gives Hillary 70% to Trump’s 30% likelihood of winning. https://iemweb.biz.uiowa.edu/graphs/graph_Pres16_WTA.cfm
July 25, 2016 @ 11:46 am
I hereby “like” your comment 🙂
July 25, 2016 @ 12:10 pm
I’m waiting until well after the Democratic Convention ends and the dust settles on both party’s events to really gauge her prospects in the fall.
July 25, 2016 @ 12:37 pm
You can put in another $850 if you want, by betting on the next president being a woman: https://www.predictit.org/Contract/769/Will-a-woman-be-elected-US-President-in-2016#data
July 25, 2016 @ 9:22 pm
Are there prices at which you would sell your shares?
July 25, 2016 @ 11:56 pm
Given certain new information (e.g., news that Hillary is dropping out), I would sell if I thought P of her winning was less than (her share price in cents) / 100.
July 26, 2016 @ 6:16 am