Wednesday, January 20, 2010

Intrade

Yesterday I won $45 on Intrade betting on a Republican win in the Massachusetts special election. A few weeks ago I won about $55, mostly on bets about where the unemployment rate would be at the end of 2009. This means that so far in my brief Intrade career I'm up by about $100.

I'm guessing that this is mostly dumb luck. Just like in the stock market, there must be people on Intrade who regularly trade on inside info. In the case of the special election these would be campaign workers who have access to inside polls, maybe even campaign operatives who know whether the election is being rigged in some way and if so, to what extent and in whose favor.

If someone collects a payout due to inside info, whose money has he won? The money of chumps like me, who trade solely based on publicly-available data. And yet I'm probably going to bet on Intrade again. It's fun. It reliably gives you an extra something to hope for throughout the day. I've never tried mood-enhancing drugs, nor will I, but I'd be shocked if they acted as effectively as small-time gambling does. Everyone who has enough self-control to not let it get out of hand should try it.

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