Intrade is Being Manipulated

Currently, the prices trading at Intrade:

Obama 83.4% of winning the election

McCain 16.1% of winning the election

However, not too long ago, Obama didn't have such a comfortable lead at Intrade. In fact, Intrade predicted a very close election, unlike other prediction markets which favored Obama. This caused some speculation that the traders at Intrade were pro-Republican. Now it is clear that McCain's winning probabilities were boosted by one particular trader:

An internal investigation by the popular online market Intrade has revealed that an investor’s purchases prompted “unusual” price swings that boosted the prediction that Sen. John McCain will become president.

Over the past several weeks, the investor has pushed hundreds of thousands of dollars into one of Intrade’s predictive markets for the presidential election, the company said.

“The trading that caused the unusual price movements and discrepancies was
principally due to a single ‘institutional’ member on Intrade,” said the company’s chief executive, John Delaney, in a statement released Thursday. “We have been in contact with the firm on a number of occasions. I have spoken to those involved personally.”

As you might guess, as much as this trader loves McCain, other more rational traders saw an opportunity to make money by selling McCain, and buying Obama. It didn't take long for Intrade to display the "true" probability of Obama winning.

It looks like its going to be a landslide!

The picture below shows the predicted distribution of electoral college.