With election calls looming on the horizon, Canadian and B.C. voters
can now buy and sell shares representing their favourite federal
and provincial political parties on the University of British Columbia’s
Web-based Election Stock Market.
Traders who participated in the 1993, 1996 and 1997 Election Stock
Markets predicted the final outcomes of federal and B.C. provincial
elections with considerable accuracy.
Now operating for the fourth time, the Election Stock Market provides
an opportunity for students, political junkies and others to learn
how financial markets work.
“The stock market is also designed to help us study the predictive
power of markets, the behaviour of traders and the dynamics of the
political campaign,” says Faculty of Commerce Prof. Tom Ross, co-director
of the stock market.
The exchange includes three markets with respect to a Canadian
federal election–the seats market, a majority government market,
and the popular vote market. Markets are also open for a B.C. provincial
election.
Registered traders use their Web browser to log into their trader
account, check market prices and account information needed to carry
out trades. No commissions or other fees are charged to traders.
“As in other financial markets, you make money by `buying low
and selling high,'” says Ross.
While the market is operating, traders earn profits by selling
contracts at prices higher than they paid for them and lose when
they sell for less. Individual traders may receive back more or
less than they invested depending upon how well they predict the
election outcomes. Contracts or shares will earn post-election dividends,
or liquidation values, which depend on the outcome of the election.
Ross believes the heightened anticipation among pollsters, traders
and the electorate for these elections will make this one of the
most active election stock markets that UBC has operated.
The election stock market is sponsored by the National Post.
For more information about the Election Stock Market, including
how to invest, hours of operation, trading, market quotes, liquidation
values, and registration, visit http://esm.ubc.ca.
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