With no debates there was nothing dramatic this week in the markets, but there was something quite interesting. The top establishment GOP candidates continued to hold onto about 60% of the likelihood of victory, but Jeb Bush ceded a lot of ground to Marco Rubio.

Sources: Betfair, Hypermind, PredictIt, http://twopointoh.predictwise.com/politics/2016RepNomination

Neither Bush nor Rubio are doing very well in the polls; the non-establishment combination of Donald Trump, Ben Carson, and Carly Fiorina have over 50% combined in the polls. But, under the assumption that the establishment will try very hard to make either Bush or Rubio the nominee, Rubio’s comparatively strong showing may help convince the establishment to rally around him. That strong showing is combined with Bush’s ability to continue to grab headlines for all of the wrong reasons (like saying stuff happens after 2015’s 45th school shooting). Of course, Bush still has a lot of money, is well vetted, and the family name that is still very popular with the Republicans.

There was no real movement around the Democratic nomination with Hillary Clinton holding steady at about 70%. Without a meaningful debate schedule, the entire process is just waiting to see if Joe Biden enters the race. He has been floating near 20% to get the nomination, unconditional on whether or not he runs. It is harder to pinpoint the probability of him running, but PredictIt has it near 50%. My assumption is that he will shoot about 35% if he were to enter the race.

Sources: Betfair, Hypermind, PredictIt, http://twopointoh.predictwise.com/politics/2016DemNomination

PredictIt announced this week that it will start margin linking soon, which is awesome news for prediction market data. As Rajiv Sethi wrote about on his blog, by capping the amount of money they hold by the total amount that someone could lose in a market (rather than on any given contract in that market), traders will have the money to end the current imbalance in pricing that persists in some of the longer term, multi-contract, markets. Most notable is that a trader could sell a share of all of the GOP candidates for $1.73 and have to pay $1.00, next summer, by definition. But, currently that would tie up $18.27, because the exchanges ties up a possible victory for every candidate; the new system will cap the loss at $0.99.