Take a look at Dale Franks' election market watch in the right column of the QandO blog. It looks like there's an excellent opportunity for arbitrage for an enterprising investor. At the moment, the "Republicans hold in Senate" plus "Republicans gain in Senate" contracts are trading for a cumulative 64.7 on the Iowa Electronic Markets, while the "Republicans keep Senate" contract on TradeSports is at 77.5.

To make money you'd want to short sell "Republicans keep Senate" on TradeSports and buy "Republicans gain/hold Senate" at IEM.

Note: all of these contracts pay 100 if their conditions are met, and 0 otherwise. So, by following my advice, you would make 12.8 for each Tradesports/IEM pair of contracts you bought, no matter which party won control of the Senate.

Unfortunately, IEM has a $500 account balance maximum, which makes the scheme hardly worthwhile -- who wants to go through all the hassle of setting up and funding an account just to make $60?



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