Speculators at InTrade aren’t particularly confident in any Democrat or Republican candidate at the moment to win the Iowa caucus. At present, Obama has the highest numbers, with the Bid/Ask at 40.6/41.9 points. Clinton is next at 34.0/36.9, and Edwards is the only other significant choice, at 24.1/24.9.

Among Republicans (scroll down), only Huckabee and Romney have significant numbers. Huckabee is at 41.0/44.3 (change -17.0), and Romney is at 51.2/54.9 (change +19.0).

Political futures markets offer a relatively dependable snapshot of political outcomes as they appear at the moment. The reason for that is investors speculate with their own money on outcomes of their choosing, favoring those with insider knowledge (or superior situational barometers) as opposed to cold-calling someone with no way to account for revealed preference (i.e., people find it easier to say they would choose something when their choices are merely theoretical than when they face the actual decision, complete with costs and benefits to each option).

In this market, contracts close at either 100 or 0 points ? if the proposed scenario (e.g., Clinton wins the Iowa caucus) occurs, then the contract for that will be worth 100 points, and those who bought at 40.6 will win 59.4 points for each contract purchased (minus commission). If the contract fails, then speculators would lose 40.6 points per contract (as well as commission).

In other words, the Bid/Ask price corresponds to confidence levels in a proposed scenario ? anything higher than 50 points suggests that the scenario is a winner (the greater than 50 points, the more likely a winning scenario ? 50 points suggests the perceived likelihood of winning or losing is equal).