#1. SIM EXCHANGE’S Brian Shiau talks back to USABLE MARKETS’ Alex Kirtland… on the usability of the Sim Exchange.
[...] I also believe gamers think of game sales in terms of lifetime sales. People remember that Halo 2 sold over 7 million copies. They don’t remember how many copies it sold between months 2 and 4 of release. They are thinking Halo 3 as an 8 million copy seller, not a 3 million copy seller between weeks 3-6 of release.
[...] Once a game nears the end of the lifespan and the total global sales has been predicted to a certain degree of accuracy, there is no longer a need to continue trading it. When the lifetime sales of a game is fully priced into a stock, players will cash out and turn their attention to new games in the same way growth investors cash out of mature companies by selling their shares.
[...] I believed it is more clarifying for players to understand that they can buy and sell at certain prices and quantities because another player is offering that to them. [...]
#2. THE SIM EXCHANGE: Stocks vs. Stock Derivatives (Futures & Options)
Brian Shiau:
[...] This is part of the reason stocks on the simExchange are called “stocks.” When we launch a derivatives market for options and futures, we will call them “options” and “futures.” Probably a rumor slightly overshadowed by the black Xbox 360 Elite, but yes a derivatives market on the simExchange is coming. Remember: stocks do not expire and cash out on a regularly scheduled basis. Futures and option contracts do.
[...] Short selling is borrowing stock and selling it, hoping to buy it back at a cheaper price later and pocketing the difference. [...] Short selling is different from buying a put option or writing a call option—these concepts should not be confused and we would not be doing players any favors by mixing them up. [...]
Previous: Keith Jacks Gamble: simExchange is somewhat OK, but will remained confined in play-money land. + Brian Shiau: The Sim Exchange Works Fine, Thanks. + Robin Hanson on the Sim Exchage + simExchange a Keynesian Beauty Contest + The structure of simExchange game stocks + An invitation to join the simExchange beta + Since November 9, 2006, the Sim Exchange has attracted over 2,400 registered players. + Sim Exchange – How to earn additional money? + The Sim Exchange: Basic Trading vs. Advanced Trading + BetFair, Sim Exchange = Vertical Prediction Exchanges, First
That is really cool that a sim exchange is coming for stock options. I have always said it would be a good idea to have an option trading video game, and I think it was made possible with the connection of the internet to gaming systems. The reason it is so tough is for each stock there needs to be hundreds if not thousands of options, hence the name options. For example Google stock has options ranging from 150 to 640 in levels of 10 (known as strike prices) for the January 2011 option expiration alone. This is a lot of data!