Scared of Facebook shares? Wager on Friday's close
May 15 (Reuters) - Worried that if you buy Facebook when it starts trading Friday you'll get trampled by big banks and hedge funds? Betting on where the stock closes that day may be a safer wager.
Intrade, the online prediction market where investors can bet on numerous events, from movie box office receipts to the U.S. presidential election, started a contract Tuesday for bets on where shares of Facebook will close on Friday, their first day of trading.
The hotly anticipated initial public offering has sparked intense interest from investors big and small. Facebook has raised the expected price range for its shares to $34 to $38, and many expect the shares to make a big move in that first day.
That could be perilous for individuals. If the stock explodes on Friday, the average person might end up getting an order filled at a price much higher than he wanted as funds steamroll in and then zip back out.
Demand for the stock is expected to be enormous, which could buoy the price throughout the session and into next week, however.
Dublin, Ireland-based Intrade is offering contracts that bet on the stock closing anywhere from $25 to $60, at $5 intervals. There were only a few bids in the early betting on the contracts.
One of Intrade's more popular contracts revolves around the 2012 U.S. presidential election. More than 241,000 shares have traded in President Barack Obama's contract, and nearly 200,000 in Republican nominee Mitt Romney's contract.
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