For this, I like to use a real-money betting website called PredictIt.com. This website was created to provide research into the way markets forecast events. They do this by allowing people to bet on actual world events, such as the upcoming election, by buying “shares,” so to speak. The price of any share on PredictIt ranges from zero to $1 and represents how likely investors think an event is to happen. If the event occurs, the shares rise to $1 and investors profit. If it doesn’t, the shares are worthless, and investors lose. So, a share price of $0.50 indicates a toss-up – investors will either double their money or lose it all. Right now, the market of who will be the 2020 presidential election winner is among the most active, with a trading volume of 96 million shares. That’s a lot of people participating. This chart shows who they think will be elected president and how that’s changed over the past 90 days:
WHAT THE POLLS ARE SAYING
FiveThirtyEight.com compiles and averages national polls every day. Here are the results since March:
Who’s Ahead in the National Polls?
Biden 50.5 % Trump 43.0 %
50%
40% 40%
Mar 2020 MARCH 2020
Sep SEPTEMBER
Source: FiveThirtyEight
As you can see, Biden has had a fairly consistent seven- or eight-point lead for the past few months. Of course, who wins the presidency isn’t based on the popular vote, but rather the electoral college. For Biden to win, he has to hold all of the states that Hillary Clinton won in 2016, and flip Pennsylvania, Michigan, and Wisconsin. The average poll in these three states has Biden up by 5%, 8%, and 7%, respectively. In addition, he has one- to five-point leads in three additional states, Florida, Arizona, and North Carolina, which could turn a narrow electoral college victory into a decisive win. But polls can be unreliable – witness 2016, for example – and a lot can chance in the next six weeks, so let’s look at what people are betting on.
PredictIt Bettors Think Biden Has a 58 % Chance of Winning
$0.42 $0.66 $0.48 $0.54 $0.60 $0.42 $0.48 $0.54 $0.60 $0.66
Biden
Trump
$0.36 $0.36
Jul
Aug
Sep
JULY 2020
SEPTEMBER
Source: PredictIt
A LIBERAL LANDSLIDE
34
October 2020
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