Category Archives: Exchanges Markets

What the hell is a predicted probability??

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In response to my previous rant, I&#8217-m told that:

#1. My criticism (expressed for the third time) about the bad usability of their big, rounded button has finally be digested.

#2. The &#8220-home page&#8221- they are referring to in their blog post is not the frontpage, but the home page for the Inkling play-money prediction markets. Ah. So I went there again, and I saw this:

Will Google&#8217-s stock price hit $600 before Dec. 31, 2007?

current prediction
The predicted probability is 57.5%

Bad. Better: The current probability for the $600 outcome is 57.5% &#8212-so, yes, Inkling is predicting that Google&#8217-s stock price will hit the $600 mark before Dec. 31, 2007.

Red Monitor – Prognostic Exchange

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Red Monitor &#8211- Die 7&#215-24 Prognoseborse &#8211- German-speaking, Austria-based, real-money prediction exchange –

Globaler Marktplatz fur Prognosen.

Actually, the ABOUT US page is in German, only. Hubertus Hofkirchner (CEO) has provided the following information &#8212-the final wording is mine:

Like HedgeStreet, Red Monitor chose the regulated path and is subject to the Austrian Finanzmarktaufsicht supervision. Red Monitor lives off a small fee on traders&#8217-s profits. Red Monitor&#8217-s market design is original and patented &#8212-and scientific and private use is free.

Hubertus Hofkirchner has written a short essay in English to describe the new market design used by Red Monitor, and how it is better than CDA &#8212-or so he says. I leave the commentary to the specialists.

I&#8217-m more interested in one marketing point: Wouldn&#8217-t it make sense to have an English-speaking platform so as to attract international traders? Is Red Monitor restricted to Austrians and Germans?

If Hubertus Hofkirchner wants to leave a comment below, I&#8217-ll be happy to pass the information. He can cross-post his text here, at Midas Oracle, if he wishes.

Also, I know some of the German beta traders. If they want to pass some tips to me, I&#8217-m all ears. One of my source said that the Red Monitor&#8217-s frontpage looks like a stock exchange portal. Indeed. So my next question is (as I can&#8217-t read German, alas): Is Red Monitor in the content business, too?

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Full list of English-speaking prediction exchanges at CFM

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Addendum:

Hubertus Hofkirchner (Red Monitor CEO) has posted a comment&#8230-

Hello Chris,

Just a short note in reply to your questions following our Public-Beta launch.

“Better than CDA” — is a bit strong because there are many dimensions on which one could compare market mechanisms. There are however quite a few differences to conventional mechanisms some of which may well prove highly advantageous. I will list a few (not exhaustive):

1. The RED mechanism can capture and mathematically measure “price information”.
2. RED, as a market place, monetizes “price information” for those who have or need it.
3. The creation of predictive information &#8211- in principle &#8211- does not depend on liquidity.
4. RED distinguishes between two types of risk, one measured by volatility and one by yield (the Price of Uncertainty).
5. RED’s RealPrice data set provides new methods to identify price distortions of all kinds.

“English” – “Restricted to Austrians and Germans” – Redmonitor’s underlying platform is designed to support multi-language and multi-currency operations, in principle. As you can imagine there are many tasks which must be done before we can activate these capabilities. We will announce other languages and operating constituencies outside the European Community as and when available, so bear with us.

[…]

Best regards,
Hubertus Hofkirchner
Red Monitor

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And check Jason Ruspini&#8217-s comment&#8230-

From what I can gather, the RED mechanism has more in common with traditional options than the prediction markets we would recognize. […]

TradeSports-InTrade: United Nations > John Bolton as US Ambassador to United Nations – REDUX

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I&#8217-ve spotted an interesting comment from Canadian trader Sacha Peter on the TradeSports forum:

This will be an interesting contract. Essentially, will Bush recess appoint him? I can&#8217-t see him getting past the senate confirmation process.

I lost a few bucks (literally, it wasn&#8217-t huge) in the previous confirmation debacle, so the way they worded this contract is very unambiguous and Tradesports appears to have learned one lesson.

So here&#8217-s the contract statement:

This contract will expire at 100 if John Bolton is the US Ambassador to the United Nations at 11:59:59pm on the date specified in the contract.

This includes (but is not limited to) confirmation by the US Senate or a recess appointment by the President.

The contract will expire at 0 if John Bolton is not the US Ambassador to the United Nations at 11:59:59pm on the date specified in the contract.

This includes (but is not limited to) withdrawal of the nomination by the President, withdrawal by John Bolton himself, failure to be confirmed by the US Senate or appoinment to an &#8220-acting UN Ambassador&#8221- role under the Vancacies Reform Act.

Due to the nature of this contract please also see Contract Rule 1.9 Unforeseen Circumstances.

The Exchange reserves the right to invoke Contract Rule 1.8 (Time Protection) if deemed appropriate.

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This entry is a follow-up on my previous blog post.

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Price for John Bolton as US Ambassador to United Nations at TradeSports.com

Why the Hollywood Stock Exchange was sold to Cantor Fitzerald. – An insiders account.

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From the Horse&#8217-s mouth (Max Keiser):

Max Keiser is a financial engineer who likes to turn things into markets. After working on Wall Street during the eighties, Keiser turned his hand to Hollywood, where, rather than chase starlets as every other man in Hollywood was doing, he began commoditising those same starlets by trading them on the Hollywood Stock Exchange, a virtual market in celebrities that he created long before the BBC ripped his idea off with Celebdaq. The starlets loved him for turning them into the commodities they always wanted to be and Keiser was awarded three U.S. patents for the virtual specialist technology on which HSX runs. During his weekly NBC appearances on &#8216-Access Hollywood,&#8217- Keiser became the first person since the days of McCarthy to be boycotted by every major Hollywood studio at the same time. When Keiser accurately predicted weekend box office gross for nine weeks running on his HSX segment of NBC&#8217-s &#8216-Access Hollywood,&#8217- the major studios decided that free markets were not so great after all and called for NBC to remove the heretic in their monopolistic midst or lose access to Hollywood &#8216-talent.&#8217- HSX was sold to Cantor Fitzgerald and Keiser moved to Europe where he created Karmabanque, a virtual market in monetising dissent.

Addendum (November 16, 2006): I received this disambiguation note from someone who knows the HSX history&#8230-

Max Keiser was not involved with HSX at the time of the acquisition nor was he part of the process.

Addendum (February 23, 2007): Max Keiser replies&#8230-

To say that I was not involved with the sale of HSX to Cantor is incorrect. I did not endorse the sale of HSX to Cantor – I voted against it – because the deal with Cantor was not, in my opinion, above board.

TradeSports-InTrade: United Nations > John Bolton as US Ambassador to United Nations

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I&#8217-m curious to see who&#8217-s going to be on the &#8220-yes&#8221- side of this brand-new contract. From what I heard yesterday on NBC Nightly News, this neo-con is toasted. But maybe I don&#8217-t know the full story.

Addendum (November 15): Sacha Peter posted a comment&#8230-

Well, at least one person out there is currently willing to lay you 999:1 odds that he will get confirmed and he’s willing to stick his neck out to the tune of $10 against your $9,990 for it. It’s too bad even if you win you’ll still have to shell out $30 in commissions and $100 in expiration fees to collect your $10 in winnings. What a deal!

Nominatibility and Electability – 2008 presidential prediction markets

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Via our usual suspect Mike Linksvayer (recently featured in the New York Times for his weird diet), David Schneider-Joseph (a Foresight Exchange fanboy) on how to measure real electability of the US presidential candidates. Go reading his reasoning. His conclusion:

Put this way, it&#8217-s not a surprise that candidates with greater party ties have a greater chance of being nominated than their electability deserves. But that&#8217-s not the same thing as saying that their electability is actually lower than that of their competition.