Tag Archives: CEO

How does InTrade deal with insider trading?

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InTrade CEO John Delaney (in 2007):

Insider trading is one of the wicked problems, perhaps. Intrade is about providing the best predictive information. If insiders have information, then getting that information reflected in the market increases the quality of the information. I know this is not the conventional view concerning insider trading, and I am not arguing wholesale adoption or acceptance of insider trading. But we all know that, in the real world, insiders trade on inside information. We have even had markets on insider trading. Our view is to get the best information available into the market while we make sure there is some fair protection for outsiders.

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As I said, the problem is that this view is very unpopular among event derivative traders.

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APPENDIX: Economic arguments in favor of insider trading.

Is WeatherBill doing well, really??

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WeatherBill does so well that TechCrunch has just published two &#8211-yes, two&#8211- blog posts on it, today (Wednesday, October 17, 2007). Here&#8217-s the first one, which basically says that two VCs have just poured $12,5 million dollars in it. Good for them. The second blog post, written by another TechCrunch writer, and which has been quickly taken off their website, basically said the same, but with this twist:

CEO David Friedberg says that WeatherBill has hundreds of customers and faces such high demand that it needs to bring more people aboard to increase capacity. The site has launched not only in the US but Canada, the UK, the Netherlands, Spain, Germany, and Norway as well.

So, should we believe the content of this now-deleted blog post? Or was it deleted because this information is not accurate? Mystery. ValleyWag should investigate. :-D

APPENDIX: Here&#8217-s the deleted TechCrunch blog post on WeatherBill. (The second item that follows is the first blog post that was published by TechCrunch.)

Deleted TechCrunch WeatherBill

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UPDATE: VentureBeat on WeatherBill&#8230-

VentureBeat on WeatherBill

UPDATE: Mark Hendrickson of TechCrunch&#8230-

Our apologies for misleading everyone into thinking Weatherbill enables people to gamble the weather as if it were a casino game. The service is meant rather to provide insurance for companies that could be aversely affected by fluctuations in the weather.

Weatherbill’s CEO informs us that only companies with a net worth of at least $1 million can participate due to regulations of the Commodity Futures Trading Commission. He also says that Weatherbill is the first service to ever provide access to hedges on the weather (online or otherwise).

Also, for anyone wondering why we had two posts up about this story, that’s because Duncan and I reported on it independently by accident. I guess you could say we both find the weather very interesting.

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.

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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. […]