Iowa Electronic Markets
Henry B. Tippie College of Business
W283 PBB
University of Iowa
Iowa City, IA 52240
iem@uiowa.edu



	IEM PROSPECTUS: 1994 NEW JERSEY SENATE RACE
	VOTE SHARE MARKET
     
     At 9:00 a.m. (C.S.T.) Monday, August 22, 1994, the Iowa Electronic Market (IEM) will open trading in a market based on the outcomes of the New Jersey Senatorial Election..  This document describes the Vote Share Market related to that race, and should be viewed as a supplement to the IEM Trader's Manual.  Except as specified in this supplement, trading rules for this market are the same as for other markets in the IEM.
     
Payoffs in this market are determined by the percentage of the total popular vote each candidate receives in the November 8, 1994 election.  Thus, for example, contracts for a candidate receiving 32.4% of the popular vote will be worth 32.4 cents.
     
CONTRACTS -- The financial contracts traded in this market are:
     
	Code	Contract Name
     
	HAY  	Chuck Haytaian
	LAU  	Frank Lautenberg
	NJROF	Rest of Field
     
This market will close at 11:59 p.m. on election eve, Monday, November 7, 1994.   As soon after the election as official election returns are announced, liquidation values will be declared and funds credited to the cash accounts of the market participants.
     
DETERMINATION OF LIQUIDATION VALUES -- Liquidation values for New Jersey Senate vote share contracts will be determined as follows.  For each contract in any candidate that a trader owns at the close of the market, the trader will receive $1.00 times the candidate's share of the vote.  For example, if unnamed NJROF candidates receive 12% of the vote, NJROF contracts will pay 12 cents.  Note that these vote shares necessarily sum to one.
     
UNIT PORTFOLIOS -- Unit portfolios, consisting of one of each of the three contracts listed in the market, can be purchased from or sold to the IEM system at any time.  The price of each unit portfolio is $1.00.  Use the "Purchase" option from the TRADING MENU and enter "1$" as the name of the contract to buy unit portfolios.  Use the "Sell" option from the TRADING MENU, with "1$" as the contract name, to sell unit portfolios.  Purchases will be charged to your cash account and sales will be credited to your cash account.
     
Unit portfolios may also be purchased from and sold to other traders at current market prices.  Use the Purchase and Sell options as above but enter "MKT" as the contract name.  The price charged for such purchases will be determined as the sum of current ask prices, and the price paid for such sales will be the sum of current bid prices.  Should no corresponding bid or ask be present for one of the candidates, contracts in that candidate will be excluded from the portfolio; otherwise the number of contracts purchased or sold will be the same in each candidate.
     
MARKET ACCESS -- Current and newly enrolled IEM traders will automatically be given access rights to the New York Gubernatorial Vote Share Market.  Access is achieved via the "Market Selection" option on the Login, Market and other Menus.  Funds in a trader's cash account are fungible across all markets so new investment deposits are not required.  Additional investments up to the maximum of $500 can be made at any time.   With five days' advance notice, funds may be withdrawn on the 15th of any month.