posted April 29, 2012 07:06 AM            

Has anyone seen this site?
I am usually behind the times so it wouldn't surprise me if I am the last to notice.
Just found it after some politically oriented research.
It's something like a stock market for pundits.

quote:

---

What is a prediction market?

Intrade is a prediction market. What is a prediction market? It's a market that allows you to make predictions on the outcome of hundreds of real-world events. Stock exchanges find the price of stocks, and futures markets find the price of commodities. Prediction markets find the probability of something happening - a predefined, uncertain future event.

Will the financial markets be up today? Will a certain candidate win the next election? Who will win the Academy Awards? If you have an opinion on what will happen then you can make a prediction on Intrade. Predict correctly and you can win real money profits.

---

quote:

---

Where do my profits come from?

Your profits come from the losses of those on the other side of your prediction.

There are always two sides to every prediction. If you make a prediction by buying shares, then someone is making the opposite prediction by selling you those shares - you are saying yes, the event will happen, they are saying, no it won't. If you predict correctly your profits come for the person who sold you the shares - the person who predicted wrongly.

Let's look at an example. Trader A buys shares from Trader B at a price of $6.50.

If the market event happens the market is settled at $10.00:
* Trader A will have a profit of $3.50 per share
* Trader B will have a loss of $3.50 per share

If the market event does not happen the market is settled at $0.00:
* Trader A will have a loss of $6.50 per share
* Trader B will have a profit of $6.50 per share

As you can see, the profits of those who predicted correctly always match the losses of those that predict incorrectly. Those losses are simply transferred to the winners as profit.

If the market settles at $10.00 then the profits for the buyers comes from the losses of the sellers. If the market settles at $0.00 then the profits of the sellers come from the losses of the buyers.

Because a prediction always requires a buyer and a seller there is always the exact same number of shares sold as there are bought. Therefore there is always a perfect balance between profits and losses.

---

posted April 29, 2012 07:22 AM            

------------------
Passion, Lust, Desire. Check out my journal

posted April 29, 2012 06:58 PM            

I`ll see if I can`t find the link & compare.