Trading in Roberts Futures at Tradesports.--
Given our discussion earlier today, I thought that people might be interested in this chart of trading in Roberts futures at Tradesports since about 6:30pm ET.
(click to enlarge)
This is a 2-trade moving average.
As you can see, Roberts became the favorite for the first time about 6:47pm ET (there were several trades between about 6:47 and 7:02 at a price of 30-40) [see update below with more precise data. Roberts became the close 2d favorite to Jones about 6:48 and the favorite for the first time at 7pm, after which he dropped below Jones and then overtook her again at 7:40pm about 6 minutes before the choice was announced by AP.] The market anticipated by about an hour the NBC announcement at about 7:47 that AP was reporting Roberts as the nominee[, but only by making him one of the top two favorites with Edith Jones]. So Clement, the early betting favorite, was replaced by Jones as the betting favorite, who was replaced by Roberts as the betting favorite, who has remained so until just before Bush's news conference.
I still await the actual announcement in a few minutes.
UPDATE: While I was writing the above post, Orin posted on this topic, so I went back and checked some of the other nominees just to be sure who was the favorite at what time, downloading the actual trading data for Roberts, Jones, and Luttig. While Roberts first jumped up to a price of 30% at 6:48ET (about an hour before AP broke the story), Edith Jones was then trading at about 35.7%, so Roberts was then running a close second to Jones. Roberts briefly became the favorite at 41.9% at 7pm (and his next 5 trades were 38% or above), after which he remained one of the favorites along with Jones and Luttig until 7:40 when he overtook both of them for good to trade at 25. Roberts rose to about 30 at 7:43, 30-55 at 7:44, 50-55 at 7:45, and he jumped from 60 to 90 at 7:46.
At 8:38pm, Orin posted:
Although Tradesports.com gave John Roberts less than a 1% likelihood of getting the nomination as of about two hours ago, right now it is giving Roberts a 99.5% chance of getting the nomination. Looks like Tradesports was right after all — at least after the announcement was made.
This is incorrect or misleading:
1. At 6:38pm ET, exactly two hours before Orin's post at 8:38pm ET, Roberts had most recently traded (at 6:34pm) at 10%, not 1%, which made Roberts one of several favorites (see the chart above). Roberts had, however, traded at 1% just 45 minutes before that (at 5:55pm).
2. At 6:48pm (almost two hours before Orin's post and nearly an hour before the final press leak), Roberts became one of the top two favorites for the first time, trading at 30. At 7pm, for the first time, Roberts became the favorite at 41.9%. After remaining one of three favorites for the following 40 minutes, Roberts became the favorite for good at 7:40pm.
As Frank Cross has noted, people may expect too much of trading markets. If they function well, they reflect the best estimate (at the time of the trade) of the occurence of a future event. As information changes, estimates can and should change. Whether you think Tradesports did a "good" or a "poor" job reflecting the best estimates of who would be appointed depends on your point of view, and the time frame chosen. Two hours before the 7:46pm AP/NBC report that Roberts was the nominee, Tradesports gave no hint that Roberts would be chosen. About one hour before the announcement, Tradesports began showing him as one of the three favorites, which was far from a consensus view at the time. Certainly, I continued to share the view of many experts that Bush would probably choose a woman or a minority. About 5-6 minutes before the AP/NBC press announcement, Roberts finally edged ahead to stay.
