For those who don’t know, InTrade contracts are worth $100 if they win.  McCain contracts are currently trading at $51 each, implying the market believes he has a 51% chance to win.  I don’t have any complex deligate what-if tables that explain why I bought these, but here are some of my gut feelings on current InTrade pricing:

 I believe intrade users have a front runner bias that is not justified.  Perhaps there are a significant number of users who are buying contracts for later bragging rights to their friends down the road.   I don’t think McCain is above 50% right now as the contracts imply.

Romney: I purchased these contracts at $24 because I believe he is closer to 30 or 35 percent to win.  The Jan 20 Rasumussen poll  shows him winning Florida with a 5 point margin.  Rasmussen has the best polling track record this election season (especially in Iowa).  If Romney wins Florida (a winner takes all delegate state), I believe his 2:1 delegate lead will leave them tied for the GOP nomination. 

Edwards: I bought these contracts at $1.  For no quantifiable reason, I think he is about a 1:30 chance which makes these very profitable.  Polls and election swings are just not predictable enough to be pricing him at 1:100 (not trying to upset anyone, but I’d guess there is a 1:100 chance at an assasination attempt against one of the front runners… 1% Edwards makes no sense to me).

Paul: I bought these at $1.80.  I don’t think the expected return on these is as good as Edwards, but again I think Paul is above 55:1 to win.  One small Hickup in the McCain campaign could send many voters towards Paul.  Huckabee supporters could also find a logical fit in Paul if they could look past his foreign policy.  The crashing economy and dollar could also be a benefit to his conservative fiscal policy stance.  There is also a chance of a scared-to-lose-to-Hillary switch that could be flipped if the the “70% of the US opposed to Iraq war statistic” gets brough back to GOP discussions.  Paul has a 5 to 10 percent base in almost every state, and that alone should put him above 50:1.