Updated from 11:13 a.m. EDT

Are you ready for President Hillary?

The markets are. The political markets.

Political insiders have long known that if you really want to know what's going on in a campaign, you can't just look at the opinion polls.

You have to talk to the bookies. Get the odds.

And this time around, they're telling a story.

Political bookmakers report a surge in betting on Hillary Clinton to secure the Democratic nomination and to go on to win the November 2008 presidential election.

Barack Obama's support has faded dramatically since early spring, they say.

"The market is saying she has a lock on the nomination," says David Buik, commentator for the London-based betting exchange Cantor Spreadfair, a division of the trans-Atlantic financial firm Cantor Fitzgerald. "That's what the punters are telling us."

These days political betting doesn't rely on old-fashioned odds. Instead it uses online betting exchanges which operate like a regular financial market. You buy and sell "futures" in individual candidates just as you would oil futures or shares. The contracts pay $1 if the candidate ends up winning, and zero if they lose. So prices fluctuate between 0 and 100 cents, reflecting the candidates' perceived percentage chance of winning.

Thanks to the U.S. government's puritanical gambling laws, most of these exchanges operate in London or Dublin, Ireland, although the University of Iowa (quirkily) has an exemption to run a small electronic market.

To watch Janet Al-Saad's video take of this column, click here .

As several of these electronic markets are based offshore, many or even most of those betting are likely to be foreigners. However, they will also include U.S. citizens living abroad as well as others who are able to find ways to get bets placed overseas.

If the prices overseas differed enormously from those available at, say, bookmakers in Las Vegas and Atlantic City, you would expect arbitrageurs to close the gaps. So far, the prices in overseas markets are not noticeably different from those in the electronic market in Iowa.

In numbers? Across the markets, "shares" in Hillary Clinton have rocketed above 50 cents in the last few weeks, meaning the market is, astonishingly, giving her a better than 50% chance of winning the nomination.

Meanwhile Sen. Barack Obama, who was level with Senator Clinton at around 42% as recently as April, has faded remarkably to about 3%.

No one else is really in it. John Edwards is finding little support right now even at just 5%. The rest? Meh.

Hillary's lead in the betting is so strong that in some markets she's already being given a 35% chance of winning the final run-off for the White House itself.

Don't believe any boos you hear from Rush Limbaugh or Fox News. That outcome would be just wonderful for business. Can you imagine?

If the betting on Hillary looks remarkable, check out the action on the Republican betting slips.

John McCain came into the year being given around a 50% shot at the nomination. And the long-standing GOP front-runner was still there, holding steady, just two months ago. If anything, he was firming up his lead.

Today? Try 8%.

No, that's not a typo. Betting on the "straight talk" maverick has collapsed. The fast money says his support for the immigration bill has destroyed his chances with the Republican base. "The punters are saying McCain has no chance at all," says Cantor's Buik.

Instead, the money right now puts it at a two-way race between Fred Thompson and Rudy Giuliani, with former Massachusetts Governor Mitt Romney running a decent third.

Although the prices vary a bit between markets, Thompson and Giuliani roughly average about 31% each, while Romney is about 24%.

Thompson's jump into the race has fulfilled the prediction made to me over drinks in a Boston bar by one of Mitt Romney's operatives two months ago. Thompson, a "personality" candidate, has taken more support from Rudy Giuliani than from Romney.

In the past, political futures markets have had a pretty good record of predicting outcomes. They have tended to do better than a simple headline reading of the opinion polls, especially at this sort of distance. Right now, the polls reflect name recognition as much as anything.

The question is whether the betting on Hillary Clinton is as smart as it is heavy.

The former First Lady carries a lot of negatives and a lot of baggage.

If you think there's a good chance she won't get the nomination, then now would be the opportune moment to go "short," hedge fund style, and bet against her.

My own two cents? If I were trading, rather than writing, I'd take this moment as "buying opportunities" for shares in Barack Obama and Mitt Romney. There is a long way to go before the primaries.

In keeping with TSC's editorial policy, Brett Arends doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships. Arends takes a critical look inside mutual funds and the personal finance industry in a twice-weekly column that ranges from investment advice for the general reader to the industry's latest scoop. Prior to joining TheStreet.com in 2006, he worked for more than two years at the Boston Herald, where he revived the paper's well-known 'On State Street' finance column and was part of a team that won two SABEW awards in 2005. He had previously written for the Daily Telegraph and Daily Mail newspapers in London, the magazine Private Eye, and for Global Agenda, the official magazine of the World Economic Summit in Davos, Switzerland. Arends has also written a book on sports 'futures' betting.