Let's Make This Vote Interesting, Shall We?

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Even political pros are hedging their bets on the outcome of a presidential horse race that shifts almost daily. But one prophecy has been surprisingly confident: that of the online futures market, where thousands of people bet real money on the race. The major exchanges — the Iowa Electronic Markets and Intrade — have, on average, given Bush about a 60% chance of winning since September. While some say the markets are too small to be clairvoyant (only $8 million has been traded in the Bush contract at Dublin-based Intrade, the largest market), they have impressive records. Since 1988, the Iowa exchange's average error in presidential races has been less than 1.5 percentage points — compared with more than 2 points among major polls, says Forrest Nelson, a founder of the exchange.

The only serious tremor came on Oct. 15, when a trader sold roughly $140,000 of Bush contracts on Intrade for no obvious reason. Bush futures fell from 54¢ (giving him a 54% chance of winning) to 10¢. Within six minutes the price was back to 52¢, as traders snapped up bargains. The tumult led to speculation that someone might have been manipulating the market to plant doubts about Bush. But John Murray, a futures trader in New York City and one of Intrade's 43,000 members, says political biases don't sway serious traders. Neither do national polls. Instead, Murray does the math. Using research, he estimates the chance that each candidate will win each state. He tweaks his map daily. "I have Bush at around 285 electoral votes," he says. Kerry fans may want to consider buying Bush futures. Come Nov. 2, they can find something to cheer either way.