UBC Election Stock Market Opens for Trading

The University of British Columbia online market that has accurately predicted the outcome of the last two federal elections is back in business.
The Sauder School of Business UBC Election Stock Market (UBC-ESM) opens December 13, 2005, for trading on the January 23, 2006, Canadian federal election.

The UBC-ESM is an online, real-time market where the “shares” (or contracts) being traded are based on the outcome of an election, and has operated during several federal and provincial elections since 1993.

Past UBC-ESMs have provided accurate predictions of final vote and seat shares, including predictions within a few seats of the 2005 B.C. Provincial Election and 2000 and 1997 Federal Elections.

Participants in the stock market invest their own funds to buy and sell financial contracts representing the political parties, and in addition, bear the risk of losing money as well as earning profits.

“Election stock markets, like the UBC-ESM, have proven themselves capable of predicting with great accuracy the results of elections in Canada, the United States and elsewhere,” says Professor Tom Ross, Director of the Phelps Centre for the Study of Government and Business and Co-Director of the UBC-ESM.

“Markets such as this one are successful, in part because they capture the opinions of a geographically diverse electorate, through the traders. The fact that they have invested their own real money provides motivation to the traders who can earn profits or lose money depending on their success at predicting the political parties’ fortunes.”

Three markets will operate during the lead-up to the federal election: a “Seats Market,” a “Popular Vote Market,” and a “Majority Government Market.”

The UBC-ESM operates on a not-for-profit basis, with the results of the market contributing to research and teaching at UBC on market and trader behaviour. The minimum deposit required to open an account is $25, and the maximum amount that may be invested is $1,000 per account.

At the close of the market, participants’ portfolios are purchased by the UBC-ESM at prices determined by the election results. Individual traders will earn profits or bear losses depending upon whether the final values of their portfolios exceed or are lower than their initial investments.

PLEASE NOTE : The Election Stock Market will be open from December 13, 2005, at 3 a.m. PST to January 22, 2005, at 11 p.m. PST. Individuals will not be able to open accounts until after the market opens at 3:00 AM on December 13, 2005.

To open an account or to watch the results, visit http://esm.ubc.ca. More UBC-ESM information and a trader’s manual are available from this site.

The Sauder School of Business at the University of British Columbia is Canada’s leading academic business school. Recognized globally for its contributions to management practice through innovative research and teaching, the school is dedicated to opening worlds of opportunities for its students, alumni and associated communities.