October 01, 2016
Grad Analyzes “Stock Market” for Politics
Wish you could have invested in which candidate would come out on top in the presidential election?
PredictIt is an online, real-money political prediction market where traders create an account, fund it like a brokerage account and then buy and sell shares on the likelihood of political events happening.
Christopher Chidzik ’12, of Washington, D.C., who majored in economics and political science at Susquehanna, is a data analyst for the emerging company.
“I follow general price trends within markets, write the analysis articles that appear on the website and make data available for media inquiries as well as for academic research,” Chidzik says.
How does it work?
Each trade has a “yes” and a “no” position. If an event happens and the trader owns shares on the “yes” side of the market, the share is redeemed at one dollar. If the event doesn’t happen, the trader who owns the “no” position has his or her shares redeemed.
For example, in September, traders were confident Hillary Clinton would become the next president, with shares trading at 73 cents. If a trader thought Clinton would win the election, he or she could purchase a “yes” share starting at 73 cents. Another trader who did not believe she would become president could place an offer at 27 cents on the “no” side of the market.
Data gathered from trader behavior was used to track the perceived leanings of the electorate. Knowing this, Chidzik was looking ahead long before the presidential election was over. He’s anxious to seek what he and others can learn from PredictIt’s data, which has been shared with universities to facilitate academic research.
“I would like to continue to develop our academic partnerships to facilitate more research and expand the in-house research that is performed,” he says, “to bring more analysis and insights to traders and media outlets. The questions that we pose are not only related to U.S. elections, but also world events, polling outcomes, congressional actions and supreme court cases, to name a few.”