Looking to bet on — errrr, hedge your exposure to — the 2012 presidential election?
Assuming a large amount of money is on the line, you'll probably need to use the Ireland-based site Intrade, which falls outside of U.S. jurisdiction.
That's because the Commodity Futures Trading Commission has denied the request of a Chicago firm to offer "political event derivatives contracts."
The CFTC "determined that the contracts involve gaming and are contrary to the public interest," the commission said April 2.
The firm that wanted to offer the contracts, the North American Derivatives Exchange, unsurprisingly disagrees with that conclusion.
"While we will review the CFTC's decision, we felt strongly that these products met all legal and regulatory criteria for listing, and that the public would benefit from having these products traded on a well-regulated exchange, rather than an unregulated offshore venue as currently is the case," the Nadex said April 2.
There is one legal onshore option for folks who are looking to hedge their political risk. The University of Iowa's Iowa Electronic Markets, which operates on a nonprofit basis and for research purposes, is not regulated by the CFTC.
The Iowa Electronic Markets currently project that President Obama has a 62% chance of winning re-election, but the stakes are low. Participants can't put up more than $500.
