Hank Scorpio
Over the past 12 months, Ive turned $200 into more than $25,000 via the Intrade prediction markets.
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Tag Archives: prediction markets
Box office prediction markets dont work out at the Iowa Electronic Markets.
…- and so the IEM honcho condemns the Cantor Exchange.
I disagree.
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Prediction Market Journalism
Here’-s a new application of prediction markets now under review for a grant: Prediction Market Journalism.
Here’-s how it works: a journalist in London wants to investigate government plans to fund long-acting reversible contraceptives (LARC) in schools.
The journalist opens an either/or real-money, public prediction market question: Will the government fund LARC for girls in school clinics?
The journalist is interested in questions like: How safe is LARC? What companies make LARC? Which company would supply school clinics with LARC, and why that particular company? Who would profit from LARC distribution in school clinics? What other contraceptives are currently government funded in schools? Both the journalist AND prediction market traders want these questions answered. The former, to publish. The later, to make better market predictions from.
So, in Prediction Market Journalism, traders can help answer these questions. Traders contribute documents, video, photos, tips, links- whatever helps the journalist do the burdensome investigative research. With sufficient vetting, User Generated Content (UGC) is posted for public viewing, thus helping everyone to make better predictions.
In short, PM traders can indirectly effect the market on which they make predictions. Journalists get both crowdsourced investigative research and a percentage of trading commissions.
That’-s a new application of prediction markets.
Flu prediction markets can correct Google Flu Trends.
2 practicing physicians laugh at using collective intelligence for nation-wide flu detection:
[…] Flu Trends tracks almost perfectly with data on influenzalike illnesses that the CDC obtains from doctors’- offices. And as an added bonus, Flu Trends detects outbreaks up to two weeks earlier, when people are still sitting at home sneezing into their keyboards. […]
But if officials monitored only Flu Trends, it would be difficult to sort the signal from the noise —in addition to losing critical details on who is sick. Things besides an actual flu outbreak can cause people to search the Internet for flu information. We would imagine that Flu Trends would spike on the release date for a flu-related movie —maybe Outbreak 2: Electric Booga-Flu. And what happens if a pandemic flu scare hits the nightly news? Flu Trends’- ability to detect when the real pandemic hits will be obliterated when people, including those without symptoms, start to search the Internet. Monitoring drugstore sales has the same issue: A jump in cold-medicine sales may mean a flu outbreak, but it could also mean that CVS is running a sale or that flu fear is causing people to stock their medicine cabinets. […]
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They end their articles saying that Google can’-t cure the flu, anyway. [???]
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The response to the objections they jot down in the 2nd paragraph above is easy:
- Informed by all other means, the event derivative traders can determine whether the spikes in Google Flu Trends are due to abnormalities (see the 2nd paragraph in the excerpt above) or due to the real spreading of influenza.
- Hence, the flu prediction markets have a much higher social utility than Google Flu Trends. Chris Masse said so.
- David Pennock, go writing another research paper about that.
- History will retain that David Pennock was research scientist under Chris Masse’-s reign in the field of prediction markets.
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Google Flu Trends
Iowa Health Prediction Market
The “predict flu using search” study you didn’t hear about – by our good Doctor David Pennock
BBC
New York Times
WSJ Health blog
University College Cork (UCC) School of Medicine + Intrade
Dylan Evans’- website
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Previously: #1 + #2 + #3
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People, dont pay real money to attend the San Francisco vendor mini-conference on prediction markets.
I have gotten many e-mails from business people asking me whether they should attend the San Francisco vendor mini-conference on prediction markets in January 2009. My advice: Don’-t go. Don’-t pay a single cent for it.
- It is basically a vendor fair. Four software vendors are lined up. (I am told they have to fork over about $800 to take the stage.) They will over-sell the prediction markets and feed you with promotional material.
- The conference organizer is commissioned by some of those vendors. He is biased from the toes to the hair.
- Only an idiot would pay $300+ to listen to promotional material. Don’-t. Never pay to listen to salesmen.
- One scholar will feed you with highly theoretical material, which you can get for free on Midas Oracle —-99% of which you don’-t need anyway.
- One scholar has never published anything on prediction markets —-as far as I know (I could be wrong).
- One Robin Hanson fanboy and prediction market enthusiast will pump up the enterprise prediction markets. Never trust the overly enthusiast people. Never trust people who belong to one school of thought. Do trust, instead, the independent minds who use the scientific approach.
- Do listen, instead, to the thinkers who have nothing to sell you.
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Collective Intelligence – Prediction Markets – NewsFutures
Emile Servan-Schreiber of NewsFutures
YouTube videos:
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1/2
PART 1: EVIDENCE OF PREDICTION MARKET ACCURACY
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2/2
PART 2: WHY PREDICTION MARKETS ARE ACCURATE
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Q&-A1
Q&-A 1: Aren’t political prediction markets just following the polls?
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Q&-A2
Q&-A 2: Why did prediction markets fail to predict the lack of weapons of mass destruction in Irak?
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Q&-A3
Q&-A 3: Would market predictions still be accurate if everyone believed them?
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Q&-A4
Q&-A 4: Is Democracy ready for prediction markets?
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Q&-A5
Q&-A 5: How can trading prices translate into probabilities if individual traders don’t trade accordingly?
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In-House Vs. Outsourcing
BetFair Predicts is paying a social media consultant.
The Hollywood Stock Exchange / Cantor Exchange is paying a community service provider.
HubDub’-s community services are performed in house.
Should community building be a core constituent of a prediction exchange? I’-d say “-yes”-. It is not something to outsource.
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Previously: Cantor Exchange
Previously: Should the Hollywood Stock Exchange become a real-money betting exchange? – 2007-10-04
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CFTC-regulated, real-money prediction markets about movie box office – Cantor Exchange
Cantor Exchange
http://www.cantorexchange.com/ —- A twin site of the Hollywood Stock Exchange.
Here are my early thoughts about the “-Cantor Exchange”-. I regret to say that their “-Cantor Exchange”- website does not seem very usable. (I hope it is not a bad omen.) It is impossible for me to copy their explanations posted on their webpages (other than the 2 press releases) and to republish that material in this post.
The second thought that comes to my mind is that their offerings are not standardized (their event derivatives are described in HSX lingo), and I wonder whether the real-money traders, who are accustomed to dealing with the CME, the NYSE, or InTrade, but who are not familiar with HSX, will make the effort to adapt. We will see. (I don’-t think that the HSX play-money traders will go speculating on this real-money prediction exchange.) The collateral question is, why would the Cantor Exchange (a brand-new exchange with not a single trader, as of today) be better positioned to organize event derivative markets on movie business than, say, HedgeStreet, InTrade, BetFair, or even the CME? Obviously, Cantor Fitzgerald (a bond broker) are thinking that they can leverage their Wall Street clientele and the HSX population to branch out and start up a brand-new, CFTC-regulated, real-money prediction exchange. It’-s quite a big bet. I say “-branch out”- because starting off a real-money prediction exchange (Cantor Exchange) is quite different than running a play-money prediction exchange (HSX). Just look at how difficult it has been for HedgeStreet, which started off in 2004, and escaped bankruptcy in 2007 thanks to their rescue by IG Index. After 4 years, HedgeStreet is still not profitable, and it will probably take more years before it turns the first profit. Let’-s wish a better future for Cantor Exchange.
I will update this present post, later on, linking to the reactions from the media and the blogs. (Cantor will be holding a conf call this Tuesday, so some media coverage will pop up over the next days.)
Here is a Financial Times news article, which won’-t tell you much more than the 2 press releases re-published below.
Here’-s Variety.
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Press releases:
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CANTOR ENTERTAINMENT TO ANNOUNCE MOVIE BOX OFFICE CONTRACTS
TO MOTION PICTURE INDUSTRY AND INVESTOR COMMUNITY
Cantor Fitzgerald Files Application for Domestic Box Office Receipt Contracts
Los Angeles, CA- New York, NY – (December 8, 2008) – Cantor Entertainment, which provides various services to the entertainment industry and owns the Hollywood Stock Exchange, is pleased to announce that Domestic Box Office Receipt contracts will soon be available to the motion picture industry and investor community. Cantor Fitzgerald, its parent company, announced earlier today that it has filed an application to launch the Cantor Exchange, whose first listed product will be Domestic Box Office Receipt contracts.
Domestic Box Office Receipt contracts will offer film finance professionals and traders a new opportunity to hedge and speculate on the theatrical performance of wide-release Hollywood movies. Domestic Box Office Receipt contracts will be a next generation film-financing tool that allows market participants to hedge risk and provides them profit opportunities based on the first four weeks of a film’s box office revenues.
“It’s clear from our conversations within the industry and investment community that there is a tremendous opportunity to introduce this exciting new tool to complement existing film financing alternatives. The market for Domestic Box Office Receipt contracts offers the motion picture industry, investment funds, banks and all other prospective investors a federally regulated trading exchange dedicated to the entertainment industry,” said Andrew L. Wing, President and Chief Executive Officer of Cantor Entertainment. “Our involvement in Domestic Box Office Receipt contracts reflects our continuing commitment to expand Cantor Entertainment’s numerous services in the entertainment industry.” The first Domestic Box Office Receipt contract is expected to be listed on the Cantor Exchange in the first quarter of 2009. Cantor Exchange is subject to final approval by the Commodity Futures Trading Commission (“CFTC”).
About Cantor Entertainment
Cantor Entertainment, a division of Cantor Fitzgerald, L.P., provides services to the entertainment industry. Cantor Entertainment also owns the Hollywood Stock Exchange (www.HSX.com), the world’s leading virtual entertainment stock market.
About Cantor Fitzgerald, L.P.
Cantor Fitzgerald is a leading global financial services firm. The Cantor Fitzgerald franchise includes institutional equity and debt sales and trading, investment banking, private equity, as well as other businesses and ventures. For over 60 years, Cantor Fitzgerald, a proven and resilient leader, has been committed to delivering a unique brand of unparalleled product expertise, innovative technology and customer service to its clients around the world. For more information, please visit www.cantor.com.
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Cantor Fitzgerald Announces Application for Cantor Exchange
Domestic Box Office Receipt Contracts are Expected to be First Contract Market
A New Tool in Film Finance
NEW YORK–-(BUSINESS WIRE)–- Cantor Fitzgerald, L.P., a leading global financial services firm, announced today that it has filed an application with the Commodity Futures Trading Commission (“CFTC”) to launch the Cantor Exchange. Cantor Exchange intends to list Domestic Box Office Receipt contracts as the exchange’s first traded product.
“The Cantor Exchange and our intention to list Domestic Box Office Receipt contracts reflect our continuing commitment to innovation in the finance and entertainment sectors,” said Howard W. Lutnick, Chairman and Chief Executive Officer of Cantor Fitzgerald.
Subject to final regulatory approval of the Cantor Exchange application, Domestic Box Office Receipt contracts will offer film finance professionals and traders a new opportunity to hedge and speculate on the theatrical performance (ticket sales) of major film titles. Domestic Box Office Receipt contracts will be a next generation financial management tool that allows film professionals to hedge risk and provides speculative opportunities to other market participants based on the first four weeks of a film’s box office performance.
The first Domestic Box Office Receipt contract is expected to be listed on the Cantor Exchange in the first quarter of 2009, subject to final approval of the Cantor Exchange application by the CFTC.
About Cantor Exchange
Cantor Exchange is launching the first trading platform based on movie box office revenue, and expects to begin listing Domestic Box Office Receipt contracts in the first quarter of 2009, subject to final regulatory approval. Cantor Exchange is a division of Cantor Fitzgerald, L.P., one of the world’s leading financial services firms, and is partnered with Cantor Entertainment, another subsidiary of Cantor Fitzgerald, which provides services to the entertainment industry and owns the Hollywood Stock Exchange® (www.HSX.com), the world’s leading virtual entertainment stock market.
About Cantor Fitzgerald, L.P.
Cantor Fitzgerald is a leading global financial services firm. The Cantor Fitzgerald franchise includes institutional equity and debt sales and trading, investment banking, private equity, as well as other businesses and ventures. For over 60 years, Cantor Fitzgerald, a proven and resilient leader, has been committed to delivering a unique brand of unparalleled product expertise, innovative technology and customer service to its clients around the world. For more information, please visit www.cantor.com.
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UPDATES WILL BE POSTED BELOW, LATER TODAY (AND DURING THE NEXT DAYS)…-
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[T]he initiative is not for an application for a product extension of HSX. Rather it is an application for the launching of a new futures market, the Cantor Exchange, which will list Domestic Box Office Receipt Contracts. The contracts will also be known as Movie Box Office Contracts.
There are some similarities with HSX in that Movie Box Office Contracts are modeled on the MovieStock methodology of our site. For example, the contracts will be based on four weeks of a film’-s domestic box office revenue. The regulatory approval process is inherently uncertain, so it’-s a bit premature to say we are moving into real-money film trading markets just yet, but that is our intent.
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That is from Alex Costakis, MD of HSX.
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Here’-s the Cantor Exchange project leader: Richard Jaycobs.
He seems to be a man open to suggestions.
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CNBC on Cantor Exchange —- Via Jason Ruspini
Fox Business on Cantor Exchange –-
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Financial Times:
All eyes on Hollywood futures
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Previously: Should the Hollywood Stock Exchange become a real-money betting exchange? – 2007-10-04
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At the contrary, mister Kirtland.
Contra Alex Kirtland, I believe that the development of play-money prediction exchanges using MSR (like HubDub or AskMarkets), which popularity is now proved, is much more important news than stuff about CFTC-regulated, real-money prediction exchanges (like HedgeStreet or the Cantor Exchange), which popularity is uncertain.
Inkling Markets, HubDub and AskMarkets have been techcrunched —-that has not been the case for HedgeStreet or the Cantor Exchange. Practically, that means a great injection of PageRank, hundreds if not thousands of bookmarks, and plenty of new users. That’-s not what I call being “-overshadowed”-.
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Worlds #1 finance blogger withdraws all his money from InTrade… and blogs about it -detailing his negative customer experience to his thousands of Wall Street readers.
Market Movers:
Dec 3 2008 5:52PM EST
The Problem With InTrade
I recently withdrew money from an InTrade account I’-ve had for some years. The total cost of withdrawing the money was $53.10: A $20 fee to InTrade for “-processing the bank wire”-, a €10 ($13.10) wire-transfer fee to National Irish Bank, and a $20 fee to Bank of America, the intermediary bank via which the money arrived in my Citibank account. If Citi had charged their customary $25 incoming wire fee, the total would have been $78.10.
You need to have a very large balance at InTrade, or an incredibly successful trading strategy, to make trading there worthwhile if it costs the best part of $80 just to withdraw your money. And prediction markets need a critical mass of users, otherwise they die. InTrade, for one, can count me out.
[Felix Salmon]
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Posted: Dec 03 2008 6:24pm ET
I’-ll definitely use the check option next time —- but there’-s no indication on their website as to which one is cheaper, and I stupidly thought that a wire transfer would be cheaper than printing and posting a check.
By Felix [Salmon]
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Posted: Dec 04 2008 04:46am ET
PayPal will not process transactions to online gambling sites (including Intrade) from the US. After the Unlawful Internet Gaming Enforcement Act none of the payment providers will process these transactions, that is why you are stuck with check and wire transfers.
I expect that Antiguan sports books offer free withdrawal because they have much higher margins than Intrade and therefore can absorb the costs elsewhere.
By nigeleccles [Nigel Eccles of HubDub]
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Previously: Why did John Delaney shut down TradeSports?
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Previously: The InTrade predicton markets on the viability of InTrade won’-t reveal *ANYTHING* about the future of InTrade.
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Previously: on TradeSports death – on InTrade’-s viability
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