Republican Presidential Debate

Debate, Day After: Which Republican presidential candidate won the debate last night? Apparently, almost all of them did. I got emails from Santorum, Romney (a million of them), Perry, Bachman and Cain telling how great they did. Nothing from Paul, Gingrich or Huntsman, in case you wondered. (UPDATED: OOPS, I just found something from Paul's people criticizing Perry). Although, I don't think I've ever received one from Huntsman. I am in Iowa, you know. But the candidate who got his nickel's worth from the debate was Romney, according to the Iowa Electronics Markets.

Romney's price jumps post-debate on Iowa Electronic Markets' GOP nomination market

Mitt Romney was the big winner in Wednesday's GOP presidential candidate debate, according to traders on the Iowa Electronic Markets, as his price jumped 5 cents on the IEM's recently opened Republican nomination market.

The price of the former Massachusetts governor's contract as of 9 a.m. Thursday was 39 cents, which means traders believe he has a 39 percent probability of winning the GOP nomination. Before Wednesday's debate, his contract was trading at 34 cents.

Texas Gov. Rick Perry is still the likeliest GOP nominee, according to traders. The price of his contract is 41 cents, the same price it was selling for before the debate began.

The IEM is a real money futures market operated by the University of Iowa's Tippie College of Business. The IEM gives traders the opportunity to buy and sell contracts based on what they think the outcome of a future event will be. Contracts for the correct outcome pay off at $1, all other contracts pay off at zero. As a result, the price of the contract at any given time indicates the probability that the traders assign to the event's occurrence.

Other contracts on the GOP nominee market include Ron Paul and Michele Bachmann, both of whom were selling for 2 cents before the debate started. Post-debate, Paul's price increased slightly to 2.6 cents, while Bachmann's slumped to 1.6 cents.

The Rest of Field contract -— which represents None of the Above -— was selling for 18.2 cents Thursday morning, which means traders believe there is an 18.2 percent probability that another candidate will win the nomination. That price is down slightly from the 20 cents it was selling at before the debate.

The current prices on the IEM's Republican nomination market can be found at http://iemweb.biz.uiowa.edu/quotes/356.html. More information on the IEM can be found at tippie.uiowa.edu/iem.

Perry Favoritie Among Investors

Pick Perry: Texas Governor Rick Perry took over as the front runner in Iowa in a new Rasmussen Poll and he is now also leading in the University of Iowa's Electronic Markets. Former Mass. Gov Mitt Romney and Minnesota Rep. Michele Bachmann finish out the top 3.
Here's the release:

Iowa Electronic Markets traders give Iowa caucus edge to Perry

Traders on the Iowa Electronic Markets' recently opened Iowa caucus market have given Texas Gov. Rick Perry the highest likelihood of finishing as one of the top two vote getters on caucus night.

Traders also give an equal probability for former Massachusetts Gov. Mitt Romney and Minnesota Rep. Michele Bachmann finishing in the top two.

As of 9 a.m. Wednesday, Perry's contract was selling for 75 cents, which means traders believe he has a 75 percent probability of finishing in the top two. Bachmann and Romney were both selling for 47 cents, which means traders believe there is a 47 percent probability that either of them will finish in the top two.

The IEM's real-money Iowa Republican caucus market opened Aug. 31. The caucus market differs from other IEM markets in that contracts will pay off if the candidate they represent finishes in the top two vote getters. In other markets, only the contracts for the winning candidate pay off.

Contracts are also trading for Texas Rep. Ron Paul, former Speaker of the House Newt Gingrich and business executive Herman Cain. Paul was trading at 29.9 cents, while both Gingrich and Cain are trading for 1 cent.

The Rest of Field contract, which represents a candidate for whom no individual contract has been issued, is selling for 26.2 cents.

The Iowa Electronic Markets is operated by the UI's Tippie College of Business as a real-money futures prediction market. Begun in 1988, the IEM is a research and teaching tool that has achieved an impressive prediction record, substantially superior to alternative mechanisms such as opinion polls. Such markets have been significantly more accurate than traditional tools in predicting outcomes ranging from political election results to movie box office receipts.

The IEM can be found online at www.biz.uiowa.edu/iem. The Iowa caucus market prices can be found at http://iemweb.biz.uiowa.edu/quotes/355.html.