Comments on: Best Trading Interface? Here’s One Possibility. http://www.midasoracle.org/2006/10/30/best-trading-interface-heres-one-possibility/ Prediction Markets For All Tue, 06 Jan 2009 15:11:52 +0000 http://wordpress.org/?v=2.7 hourly 1 By: Stock Trading Software http://www.midasoracle.org/2006/10/30/best-trading-interface-heres-one-possibility/#comment-18750 Stock Trading Software Tue, 20 May 2008 13:37:12 +0000 http://www.midasoracle.org/2006/10/30/best-trading-interface-heres-one-possibility/#comment-18750 People have a hard time even understanding the concept of "shorting". My dad constantly says why would I short? The company is worth SOMETHING so I know I will never lose all my money. But alas I guess it all is a confusing idea. People have a hard time even understanding the concept of “shorting”. My dad constantly says why would I short? The company is worth SOMETHING so I know I will never lose all my money. But alas I guess it all is a confusing idea.

]]> By: David Pennock http://www.midasoracle.org/2006/10/30/best-trading-interface-heres-one-possibility/#comment-88 David Pennock Wed, 01 Nov 2006 11:11:55 +0000 http://www.midasoracle.org/2006/10/30/best-trading-interface-heres-one-possibility/#comment-88 To answer Robert's question, yes NewsFutures uses one single contract and displays two views of that same contract. And I'll join the crowd in agreeing that offering a "buy opposite" option instead of a "short sell" option is likely more intuitive for most novice traders. To answer Robert’s question, yes NewsFutures uses one single contract and displays two views of that same contract. And I’ll join the crowd in agreeing that offering a “buy opposite” option instead of a “short sell” option is likely more intuitive for most novice traders.

]]> By: Sacha Peter http://www.midasoracle.org/2006/10/30/best-trading-interface-heres-one-possibility/#comment-85 Sacha Peter Tue, 31 Oct 2006 10:28:39 +0000 http://www.midasoracle.org/2006/10/30/best-trading-interface-heres-one-possibility/#comment-85 I've found that when casually telling friends what long and short and the bid and ask side of the book are that they pick up the risk-reward characteristics of long-only orders fairly well. But when you talk about shorting contracts, they usually get the risk-reward measure wrong when you ask them "if I short 15 contracts at 35%, what is my risk?" or they get the event wrong with what you're trying to predict. This proposal is good from a simplicity perspective, but the user interface has to be very well designed to avoid any potential confusion on whether you're betting for or against something. Because if you want to short a "not" contract, that's going long, right? Or was that short... I’ve found that when casually telling friends what long and short and the bid and ask side of the book are that they pick up the risk-reward characteristics of long-only orders fairly well. But when you talk about shorting contracts, they usually get the risk-reward measure wrong when you ask them “if I short 15 contracts at 35%, what is my risk?” or they get the event wrong with what you’re trying to predict.

This proposal is good from a simplicity perspective, but the user interface has to be very well designed to avoid any potential confusion on whether you’re betting for or against something. Because if you want to short a “not” contract, that’s going long, right? Or was that short…

]]> By: Robert McLister http://www.midasoracle.org/2006/10/30/best-trading-interface-heres-one-possibility/#comment-84 Robert McLister Tue, 31 Oct 2006 02:24:34 +0000 http://www.midasoracle.org/2006/10/30/best-trading-interface-heres-one-possibility/#comment-84 P.S. I'm not quite sure if our approach and Newsfutures' is the same. In Subcard's upcoming software there is only one single contract (but two views of that same contract). Is that how Newsfutures works as well? P.S. I’m not quite sure if our approach and Newsfutures’ is the same.

In Subcard’s upcoming software there is only one single contract (but two views of that same contract). Is that how Newsfutures works as well?

]]> By: Robert McLister http://www.midasoracle.org/2006/10/30/best-trading-interface-heres-one-possibility/#comment-83 Robert McLister Tue, 31 Oct 2006 02:19:17 +0000 http://www.midasoracle.org/2006/10/30/best-trading-interface-heres-one-possibility/#comment-83 I knew someone smarter than us had to think of this before. :) And thanks for noting the proper name ("complimentary contracts")... I knew someone smarter than us had to think of this before. :)

And thanks for noting the proper name (”complimentary contracts”)…

]]> By: Chris Hibbert http://www.midasoracle.org/2006/10/30/best-trading-interface-heres-one-possibility/#comment-82 Chris Hibbert Tue, 31 Oct 2006 00:41:33 +0000 http://www.midasoracle.org/2006/10/30/best-trading-interface-heres-one-possibility/#comment-82 This is the way that NewsFutures presents the interface currently. I wrote about this on the CommerceNet blog: http://blog.commerce.net/?p=249 In my "Introduction to PM Formats", http://blog.commerce.net/?p=238 I pointed out three foundations for the instruments that underly the concept of short selling. You can do it with a single asset, which is the way that TradeSports works. Foresight Exchange and NewsFutures have complementary assets, which work the way you describe. The IEM has the trader start by buying a basket of coupons, and sell the ones she doesn't want to keep. I think complementary assets provide the easiest model to explain to new traders, and don't have any counter-intuitive implications. (On TradeSports, you really are selling short, and on IEM, you have to buy and sell coupons you never intended to hold.) This is the way that NewsFutures presents the interface currently. I wrote about this on the CommerceNet blog: http://blog.commerce.net/?p=249

In my “Introduction to PM Formats”, http://blog.commerce.net/?p=238 I pointed out three foundations for the instruments that underly the concept of short selling. You can do it with a single asset, which is the way that TradeSports works. Foresight Exchange and NewsFutures have complementary assets, which work the way you describe. The IEM has the trader start by buying a basket of coupons, and sell the ones she doesn’t want to keep.

I think complementary assets provide the easiest model to explain to new traders, and don’t have any counter-intuitive implications. (On TradeSports, you really are selling short, and on IEM, you have to buy and sell coupons you never intended to hold.)

]]> By: Chris Masse http://www.midasoracle.org/2006/10/30/best-trading-interface-heres-one-possibility/#comment-80 Chris Masse Mon, 30 Oct 2006 20:00:34 +0000 http://www.midasoracle.org/2006/10/30/best-trading-interface-heres-one-possibility/#comment-80 Sounds like a terrific idea! Disclosure: I'm not a market design expert, so my opinion is worthless. Sounds like a terrific idea!

Disclosure: I’m not a market design expert, so my opinion is worthless.

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