Election Markets

As a politics junkie, I've been keeping up to date with Tradesport's markets for each of the US Senate seats up for grabs this election cycle.  Here's some (sort-of) interesting things I've found:

* Out of 33 Senate seats up for election, only 9 are actually competitive.  (I define competitive as less than a 50-point spread between GOP/Democrats, ie., a 75-25 race isn't competitive but a 68-32 race is.)

* Of those nine seats, six are held by the Republicans and 3 by the Democrats.

* Based on the current market values, PA will be lost by the GOP, but TN will be held.  These two are at the extremes of the competitive spread I mentioned.

* The remaining seven races are tight (comparatively).  Current trends have each party keeping control of the seats they already control, so little would change.  However, MT and OH are particularly tight and easily a toss-up.

* Essentially, the markets currently say that Democrats will gain ground on the Republicans toward control of the Senate (anywhere from 54-46 to 51-49), but would need a minor miracle to actually take control.  (A slightly less minor miracle would cause a 50-50 split and likely result in split committees but important votes going to Republicans with the VP Cheney tie-breaker.)

** BIG DISCLAIMER: I'm somewhat violating my own personal rule here about expectations and probabilities.  I'm calling the results as if the election were today.  The markets currently take into account that election day is several months off, and that's why so many races are nearly 50-50.  Not only that, but a 60% probability that one party wins a seat also means a 40% probability that the other party takes the seat.  Just like the markets thought Brokeback Mountain would win for best picture, they weren't right.  These markets are calibrated, not perfect.

Finally, you can play the home game at inklingmarkets.com... I understand they're adjusting their market-maker to reduce the extreme volatility that some people have seen in their trading.