Intrade's gone from US shores -- for now
The Irish prediction-market site, which lets people speculate on election results, sporting events and the like, is forced to close itself to U.S. investors. But the site promises to come back soon.
Tuesday, however, Intrade said that U.S. investors and traders would soon be able to speculate again on outcomes of elections, sporting events, Oscar winners and losers. The company said it is developing a new site that will allow what it called "legal participation" from all jurisdictions, including the United States.
What exactly that means wasn't clear. So U.S. customers have until Dec. 23 to close accounts and Dec. 31 to take their money out. But given how popular Intrade has become, rest assured: It will be back in business by the Congressional elections of 2014.
The company was sued by the Commodities Futures Trading Commission this week over improperly allowing trading in options on futures prices in gold, oil, and U.S. economic data between 2005 and 2012. The CFTC said it was seeking a permanent injunction to prevent Trade Exchange Network, which runs Intrade, from operating in violation of securities laws including a part of the Dodd-Frank Act intended to crack down on abuses in the sales of derivatives.
The suit did not mention the Intrade's elections markets.
Intrade and a number of smaller competitors were widely followed in the last three U.S. elections. Customers could invest in whether Barack Obama could beat John McCain and Mitt Romney, for example, or Senate and House elections.
Intrade trading results consistently signaled that Obama would beat Romney. On Election Day, Nov. 6., Intrade puts the chances of an Obama win at 68%.
Right now, the activity is centered on betting where the stock market would close at, and there's a lively market for bets on films that could win the Academy Award. The leaders are "Argo," "Lincoln" and "Les Miserables."
On Intrade, customers buy shares in the direction they expect on an event if their bet wins, they get $10 a share. A losing bet means losing your position.
Intrade was not the pioneer in betting the outcomes of election. That honor goes to the University of Iowa's Iowa Electronic Markets, which started making markets in the outcome of elections in 1988.
The day before the election, IEM saw Obama winning 50% plus of the national vote this year. Obama won 50.6% of the vote.
The Hollywood Stock Exchange lets people speculate on movie, actor and director performances. It's owned by Wall Street trading house Cantor Fitzgerald.
More from Money Now
Copyright © 2014 Microsoft. All rights reserved.
[BRIEFING.COM] S&P futures vs fair value: -1.30. Nasdaq futures vs fair value: -2.50. U.S. equity futures hover near their pre-market lows amid cautious action overseas. The S&P 500 futures trade one point below fair value.
Reviewing overnight developments:
- Asian markets ended on a mixed note. Japan's Nikkei +1.1%, China's Shanghai Composite -0.3%, and Hong Kong's Hang Seng -1.0%.
- In economic data:
- China's HSBC Manufacturing PMI ticked up ... More
- In economic data:
More Market News
As the market wades through what many people hope is a sixth bull year, some have grown nervous about how long the run can go.
MUST-SEE ON MSN
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'