In an election year full of talk, some people put their money where their mouths were.

Avowed political junkies around the world spent the past few weeks trading on increasingly popular online markets that allow people to invest in futures contracts based on election outcomes, just as investors use such contracts to bet on interest rates, the weather and pork bellies.

In Alaska, retired grandmother Judy White licked her wounds after betting the wrong way in a political-futures market run by the University of Iowa. At Notre Dame University, Alex Forshaw, grandson of conservative activist Phyllis Schlafly, thought he had lost $500 trading on a private market called TradeSports -- until a last-minute vote swing and some quick trading changed everything.

In Nashua, N.H., Dartmouth professor Marcus Hermansen, medical director of a neonatal intensive-care clinic, rearranged his work schedule to keep Monday through Thursday free. A lifelong Democrat, he caught himself subconsciously rooting for Montana Sen. Conrad Burns on election night, because he had bet that the Republicans would hold the Senate. (Sen. Burns appears to have lost.)

His wife didn't share his obsession. "My wife said, 'Why don't we watch a movie? Why don't we just TiVo the election results and watch it in the morning, so you can skip the states you don't care about?'" he says. "I just smiled to myself and said, 'I care about every state at this stage.'"

The Iowa futures site was founded in 1988 as an educational experiment. It limits traders to a $500 initial account, though they can generate more by trading. More than $64,000 in congressional contracts traded there this year. TradeSports, which also operates as Intrade, doesn't set limits. Trading volume for the congressional campaign was about $16 million, slightly surpassing volume for the 2004 election, when the site began listing U.S. political contracts.

Traders on these sites operate just as if they were dealing in oil or gold futures. For example, you could have paid another trader 70 cents for a contract worth $1 if the Democrats won the House. Then, as the Democrats' chances rose, you could have sold it for 80 cents or held it, in hopes of getting the whole dollar at the end when the exchange settled the contract.

The contracts involved a range of possibilities, such as who would win each chamber; TradeSports also offered contracts on many individual races. Trading continues until a winner is declared, and can last for weeks in undecided races.

Various studies suggest that the markets generally predict results better than polls do, and the two sites' prices tend to move in tandem. Some investors worry about manipulation -- a wealthy Democrat, for example, trying to make things look bad for Republicans by selling lots of Republican futures. TradeSports says that it has in rare instances stepped in to reverse trades that it considered suspect. A sudden big bet did move odds during the 2004 presidential race, but the market shifted back quickly. The University of Iowa says its $500 limit prevents manipulation.

Obviously, this is risky business. In the TradeSports market, professional traders set up software to arbitrage between contracts whenever small discrepancies occur, making trading very competitive and dicey for novices.

Dr. Hermansen remembers hearing during a presidential primary in 1999 that candidate Bill Bradley had experienced an irregular heartbeat. "The first thing I did when I got home: I kissed my wife, turned on the computer and sold my Bradley," avoiding a serious loss, he says -- even though he had "had coffee for Bradley at our house during the election."

These days, Dr. Hermansen clicks into the Iowa Web site during work breaks, the way others check stocks. Mr. Forshaw, the Notre Dame student, got so deeply into TradeSports in the past few weeks that he began writing a blog about his trades, as he popped NoDoz, munched Wheat Thins and put off studying Chinese.

"The tests, they're suffering," says Mr. Forshaw, who is majoring in finance and Chinese. "I just took a business forecasting exam. It was brutal."

Friday afternoon found the 20-year-old junior in his dorm room, with several political Web sites up on his laptop screen. Although he considers himself Libertarian, he had bought contracts calling for the Democrats to win the House. The contracts were rising, and he was moving to take his profit and shift the money to something with longer odds and bigger potential payoffs. He phoned a friend in a Senate campaign, heard things were bad for Republicans, and increased his bet on a Democratic Senate.

TradeSports on Friday still gave the Democrats only a 30 percent chance of winning the Senate -- meaning a 30-cent bet would yield a $1 payoff. That looked like a bargain to Mr. Forshaw. Even if the Democrats didn't win, he figured their odds would rise, pushing the contract's value higher before the election. Like many other futures players, he also looked for longshots that he could buy for pennies, which would pay off big if they came through. Over the weeks, he had accumulated bets against Sen. Joe Lieberman of Connecticut, who won, and in favor of the Democratic challenger for governor of Idaho, who lost.

At her home north of Anchorage, Ms. White, a 62-year-old retired public-utilities regulator, babysat her granddaughter and tracked the fortunes of her favorite party, the Republicans. She bet on them to win both the House and the Senate.

"My kids say to me, 'Mom! This is basically Internet gambling!'" says Ms. White. She laughed at the idea, given that she "invests" only $500. "I have been hooked on politics since I was in high school. I adore it, and I am a big C-Span watcher. I watch the debates from all around the country."

Dr. Hermansen, 54, went into the weekend betting that Republicans would lose the House but hold the Senate -- then deemed the most likely outcomes. But as the weekend wore on, he began to worry. He offered the Republican Senate contracts for 75 or 80 cents on the dollar, but had no takers.

By Election Day, the contract was falling into the high 60s, which he felt was too low. On election night, he strolled through his house, occasionally picking up one of the family's laptops to check his trading account, rooting for the Senate Democrats with his heart, but for the Senate Republicans with his wallet.

Mr. Forshaw's reading of the political scene, meanwhile, was pushing the student more heavily to bet the other way -- on a Democratic Senate. Almost all his $3,500 stake now was in that bet. Alternating between election returns, Web sites and an occasional worry about a looming Chinese test, he began cashing in some profits.

Then, disaster: Late returns suggested that in Virginia, Republican Sen. George Allen was heading for victory. Mr. Forshaw frantically dumped his remaining contracts at a loss, throwing his overall results into the red by about $500. By 11:30 p.m. EST, he was dejectedly thinking about Chinese again.

And then, redemption: Later returns showed a sudden Democratic surge. Mr. Forshaw began frantically buying Democratic Senate contracts again, and watched them surge higher. "The night is still young for gamblers like me!" he crowed at 12:30 a.m., putting Chinese aside yet again.

By Wednesday, he figured he was ahead a few hundred dollars. He had missed a chance to triple his money by holding his original Senate contracts, but he wasn't complaining.

Ms. White was consoling herself and facing the reality that she probably had lost all $500 she had placed at risk.

Dr. Hermansen Wednesday delivered a lecture at Dartmouth, and cursed the fact that he missed a brief chance, late on election night, to sell his Republican Senate contract at a big profit, before the Virginia news hit. Feeling the Democrats would have to sweep four tough races to win the Senate, he hadn't sold until it fell to 10 cents on the dollar. He finished with a $280 win on the House contract, but an overall loss of $180 on his $500 investment.

"Now," he says, "it is on to the 2008 presidentials."