Somebody Lost Millions Betting on Romney to Win in 2012

Oh, wow! One person lost between $4 and $7 million dollars in the final weeks of the 2012 election betting on Mitt Romney to win.

A new study finds that one person made a number of bets on the political oddsmaking site Intrade in the final weeks of the election. The study suggests this person may have been trying to make Romney’s chances look better heading into election night.

From the Wall Street Journal:

The economists, Rajiv Sethi, of Barnard College and Columbia University, and David Rothschild, of Microsoft Research, also analyze the possibility that the trader, who accounted for a third of all the money wagered on Mr. Romney in the last two weeks, could have placed his bets either to hedge on wagers in other markets or simply because he thought the price was good.

The trader remained bullish on Mr. Romney well into Election Night at a time when the GOP candidate’s odd of victory were clearly fading. But Mr. Sethi, who wrote a blog post on the study and teaches at both Columbia and Barnard, said in an interview that the pattern of the trader’s bets were not those of an irrational person. “This was someone who was extremely sophisticated. It was not someone who was dumb or stupid,” he said.