Romney’s Chances of Finishing First or Second in Iowa Dips

By Brian Beers, CNBC.com

There’s a place where some people bet money on the Iowa Caucus — and Mitt Romney appears to have the highest likelihood of paying off as a top two finisher. However, his market value has started to decline since a New Year’s Eve peak of $0.912 down nearly 10 percent to a level of $0.825 (as of 12:30 p.m. CST on Jan. 3), according to trading data in the University of Iowa’s Electronic Political Futures Markets (IEM).

The Iowa Electronic Markets are forecasting tools developed by the University of Iowa in 1988 that allows university students from around the world to invest real money trading shares in future events whose payoff is based on a successful prediction. Contracts for the correct outcome pay off at $1, while all other contracts pay off at zero.

Ron Paul contracts were the highest trading value of any listed GOP candidate less than one week ago, reaching a high of $0.900 on Dec. 29. After sinking to $0.470 two days later during the “Santorum Surge,” Paul futures were back up to a high of $0.706 on Tuesday.

One of the more interesting trades is the multi-candidate entry for the prospects of Jon Huntsman, Rick Santorum, and the others who were not listed as individual contracts. Trading for less than a dime a week ago, futures traders started shifting their money into a strong Santorum finish, reaching a recent level of $0.490 as Iowans were readying to vote.

To read more, visit:  http://www.cnbc.com/id/45858605

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