Iowa Electronic Markets steady after conventions

It’s too soon for polls to reflect what bounce if any John McCain and Sarah Palin got out of the Republican National Convention, but traders on the Iowa Electronic Markets (IEM) are mostly unmoved by the unprecedented back-to-back convention weeks.

At 9 a.m. Friday, Barack Obama’s shares were trading for 58.5 cents on the IEM’s Winner Take All presidential market, meaning traders give Obama and Joe Biden a 58.5 percent chance of winning. John McCain was trading for 41.9 cents. Before the two conventions, the market was at 60 cents for Obama and 40 cents for McCain. In the Winner Take All market, winning shares pay a dollar and losing shares are worthless.

The University of Iowa College of Business project, in which traders use real money to measure candidates’ chances, has had a strong predictive track record since it started in 1988.

In the Vote Share market, which pays a penny per percentage point, Obama was trading for 53.9 cents Friday, which means traders believe he will get 53.9 percent of the popular vote. Before the Democratic convention Obama was trading at 52.8 cents. McCain was down to 47.1 cents Friday, from the 49.5 percent he was trading at when the DNC started.

In other markets, traders predict an increase in Democratic control of both the U.S. Senate and House by a 90 percent margin. But in the one race-specific market, the Minnesota Senate race, traders expect Republican incumbent Norm Coleman to defeat Democratic challenger Al Franken.