If Yossi Beinart has his way the results of major U.S. elections won't just be about hypothetical tax changes, military policy, and public works programs; they'll impact your wallet directly via trading. The CEO of the North American Derivatives Exchange (or NADEX) says he's "trying to introduce a set of contracts that allow you to trade the outcome of an election."
Specifically, investors in these contracts would be able to buy or sell candidates based on what they view to be the probabilities of election results. As is the case with Intrade.com, candidates would be priced somewhere between 0 and $100 based on "market wisdom." President Obama's chances of re-election are currently 52%, according to Intrade. If you buy Obama contracts at $52 and he wins, you'd get your money back plus $48 in profits. If the President were to lose, Obama buyers would lose all $52.
The major differences between Beinart's proposed offering and Intrade or the Iowa Electronic Markets are primarily regulation by the CFTC and being open to "every day" U.S. investors. Beinart says this regulation will protect traders by increasing transparency and lessening the political biases buried within mainstream polls like Gallup or various news outlets.Read More »from Political Gaming? A New Push for Investors to Cash in on the 2012 Election