The days of following prices — live! — of presidential candidates and Academy Awards will soon be behind us. Glenn Okun passes on the sad news that Intrade will close its US accounts by the end of the year after fighting a losing battle against the CFTC. From CBS Marketwatch:
The Commodity Futures Trading Commission charged Intrade with violating its ban on off-exchange options trading. … “It is against the law to solicit US persons to buy and sell commodity options, even if they are called ‘prediction’ contracts, unless they are listed for trading and traded on a CFTC-registered exchange or unless legally exempt,” Director of Enforcement David Meister said in a statement.
Intrade allows customers to bet on anything from whether a certain movie will win an Academy Award to whether a dictator will be toppled by a certain date. … Intrade’s predictions were often referenced in the run-up to the U.S. presidential election.
The CFTC has rejected exchange applications in the past from companies that wanted to sell options on political outcomes.
Too bad, it was fun while it lasted. And it was an interesting experiment in using markets to predict outcomes. There are still a few out there, but Intrade has had an unusually broad range of contracts.
Update (Nov 27): great link.