Mitt Romney Picks Paul Ryan as VP: How GOP Insiders May Have Cashed in on Inside Info
The Associated Press and several television stations have confirmed that Wisconsin congressman Paul Ryan will be Mitt Romney's vice presidential running mate.
One big question that remains is, how many Republican insiders profited from knowing the pick ahead of time?
Friday’s market action on Intrade, the online trading exchange website that allows members to trade shares in future events, was giving a very strong indication that Wisconsin Congressman Paul Ryan would be Mitt Romney’s vice presidential pick.
Intrade saw an incredibly irregular spike in volume in its vice presidential pick market. After a gradual upswing in price action starting on August 4, the market for Ryan went parabolic on Friday. When the day began, one share of Ryan becoming VP was priced at $2.19 out of a maximum of $10, meaning that the sum total of activity in the market indicated that traders collectively felt that Ryan had a 21.9% chance of being chosen as Romney’s VP. By early evening, the shares jumped to $3.16 (31.6%). Just after 11pm, Eastern Time, the Romney campaign sent out an email revealing that the former Massachusetts governor would announce his pick at 9am on Saturday morning in Norfolk, Virginia. And so, by 12:09am Saturday morning, a share of Ryan’s stock was trading at a whopping and outrageous $9.40 (94%), a 329% spike over Friday’s open. Here's Intrade's latest chart on Ryan, which doesn't even include Friday's close.
Notice Thursday's close at $2.19 on heavy volume. Now imagine that line going all the way up to $9.40, because that's where it is as of this writing.
This may very well be case of “insider trading,” as Republican Party insiders who are in-the-know, and their associates, look to cash in on their advance knowledge of the VP pick.
If Paul Ryan had not Mitt Romney's choice, many Intrade traders (or maybe just one or a few big traders) would have lost a good deal of money in their frenzied rush to jump the VP announcement. But now that we know it's Ryan, it will be a good bet that certain GOP insiders spent their Friday night engaging in some most profitable online shenanigans.