Comments on: Manipulation can affect prices. http://www.midasoracle.org/2007/05/30/manipulation-can-affect-prices/ Prediction Markets For All Fri, 22 Aug 2008 00:36:08 +0000 http://wordpress.org/?v=2.6.1 By: Chris. F. Masse http://www.midasoracle.org/2007/05/30/manipulation-can-affect-prices/#comment-15694 Chris. F. Masse Thu, 31 May 2007 09:07:10 +0000 http://www.midasoracle.org/2007/05/30/manipulation-can-affect-prices/#comment-15694 <p>How many non-US traders do you estimate Intrade has?<br /> --> Gimme your number, man.</p> <p>Next question is: what's the % of American money at InTrade? Which is a better question, maybe.</p> <p>---</p> <p>Is there manipulation in the Hillary Clinton Intrade market?<br /> http://www.midasoracle.org/2007/05/31/is-there-manipulation-in-the-hillary-clinton-intrade-market/</p> <p>Is there manipulation in the Hillary Clinton Intrade market? Redux.<br /> http://www.midasoracle.org/2007/05/31/is-there-manipulation-in-the-hillary-clinton-intrade-market-redux/</p> <p>Win Justin’s Money? (re: Is there manipulation in the Hillary Clinton Intrade market? Redux.)<br /> http://www.midasoracle.org/2007/05/31/win-justins-money-re-is-there-manipulation-in-the-hillary-clinton-intrade-market-redux/</p> <p>Intrade: Obama and Clinton at near-parity<br /> http://www.midasoracle.org/2007/07/06/intrade-obama-and-clinton-at-near-parity/</p> CAT GOT PROFESSOR KOLEMAN STRUMPF’S TONGUE???? http://www.midasoracle.org/2007/07/11/cat-got-professor-koleman-strumpfs-tongue/ PROFESSOR KOLEMAN STRUMPF STILL DOUBTS THAT THERE HAS BEEN MANIPULATION OF THE HILLARY CLINTON EVENT DERIVATIVES. http://www.midasoracle.org/2007/07/12/professor-koleman-strumpf-still-doubts-that-there-has-been-manipulation-of-the-hillary-clinton-event-derivatives/ How many non-US traders do you estimate Intrade has?
–> Gimme your number, man.

Next question is: what’s the % of American money at InTrade? Which is a better question, maybe.

—

Is there manipulation in the Hillary Clinton Intrade market?
http://www.midasoracle.org/200.....de-market/

Is there manipulation in the Hillary Clinton Intrade market? Redux.
http://www.midasoracle.org/200.....ket-redux/

Win Justin’s Money? (re: Is there manipulation in the Hillary Clinton Intrade market? Redux.)
http://www.midasoracle.org/200.....ket-redux/

Intrade: Obama and Clinton at near-parity
http://www.midasoracle.org/200.....ar-parity/

CAT GOT PROFESSOR KOLEMAN STRUMPF’S TONGUE????
http://www.midasoracle.org/200.....fs-tongue/

PROFESSOR KOLEMAN STRUMPF STILL DOUBTS THAT THERE HAS BEEN MANIPULATION OF THE HILLARY CLINTON EVENT DERIVATIVES.
http://www.midasoracle.org/200.....rivatives/

]]> By: Alex Forshaw http://www.midasoracle.org/2007/05/30/manipulation-can-affect-prices/#comment-15693 Alex Forshaw Thu, 31 May 2007 09:02:18 +0000 http://www.midasoracle.org/2007/05/30/manipulation-can-affect-prices/#comment-15693 Chris: I am not sure. A few months ago I would have thought your figure would be too high. Now, who knows? I think somebody with deep pockets has been propping up Hillary's nomination contract for a long time, actually. Pure speculation on my part, but whenever there is any downward pressure on dem.nom.hillary, somebody simply freezes it with a huge bid of 500 or so Hillarys, at 50-52. Maybe said individual has extended the pressure to the PRES.HILLARY contract. Who knows. Chris: I am not sure. A few months ago I would have thought your figure would be too high. Now, who knows?

I think somebody with deep pockets has been propping up Hillary’s nomination contract for a long time, actually. Pure speculation on my part, but whenever there is any downward pressure on dem.nom.hillary, somebody simply freezes it with a huge bid of 500 or so Hillarys, at 50-52. Maybe said individual has extended the pressure to the PRES.HILLARY contract.

Who knows.

]]> By: Chris. F. Masse http://www.midasoracle.org/2007/05/30/manipulation-can-affect-prices/#comment-15692 Chris. F. Masse Thu, 31 May 2007 08:06:10 +0000 http://www.midasoracle.org/2007/05/30/manipulation-can-affect-prices/#comment-15692 Is there manipulation in the Hillary Clinton Intrade market? - by Koleman Strumpf http://www.midasoracle.org/2007/05/31/is-there-manipulation-in-the-hillary-clinton-intrade-market/ Is there manipulation in the Hillary Clinton Intrade market? - by Koleman Strumpf
http://www.midasoracle.org/200.....de-market/

]]> By: Chris. F. Masse http://www.midasoracle.org/2007/05/30/manipulation-can-affect-prices/#comment-15691 Chris. F. Masse Wed, 30 May 2007 23:48:56 +0000 http://www.midasoracle.org/2007/05/30/manipulation-can-affect-prices/#comment-15691 "Chris, how many non-US traders do you estimate Intrade has?" --> I'd say 20%. Does Alex Forshaw agree with my number?? “Chris, how many non-US traders do you estimate Intrade has?”

–> I’d say 20%.

Does Alex Forshaw agree with my number??

]]> By: Jason Ruspini http://www.midasoracle.org/2007/05/30/manipulation-can-affect-prices/#comment-15690 Jason Ruspini Wed, 30 May 2007 23:38:24 +0000 http://www.midasoracle.org/2007/05/30/manipulation-can-affect-prices/#comment-15690 <p>Thanks,<br /> 1) I'm not sure where the $1 (10%) margin comes from for the dems to win piece, unless this has to do with Intrade lowering margin requirements for long-term contracts (which would then climb over time). I have never been completely clear on Intrade's margining. Once I asked them for the exact formula they use for longterm politcal markets, but they couldn't provide it.<br /> 2) Yes maybe you could but Intrade may not have the luxury of exposing themselves to "pretty far fetched" scenarios.<br /> 3) Yes, but this comes back to my first point. That legal risk might cancel the 3% or whatever Intrade pays for $20k+ deposits. (It does seem like a non-US trader would take advantage of this though. Chris, how many non-US traders do you estimate Intrade has?)<br /> 4) Yes, the two pieces of the trade will converge when the market becomes reasonably sure who the candidate will be, so this will take 9-12 months, not 18 months, although i did only use a one year rate before.</p> <p>I really have no disagreements per se though. My gut reaction was just that it's hard to extrapolate anything general from these prices about manipulation, etc (while seeing so much brainpower thrown at it) with the legal situation as it is. If it is one manipulator, the unfettered pockets (so to speak) of everyone else should overwhelm him or her.</p> Thanks,
1) I’m not sure where the $1 (10%) margin comes from for the dems to win piece, unless this has to do with Intrade lowering margin requirements for long-term contracts (which would then climb over time). I have never been completely clear on Intrade’s margining. Once I asked them for the exact formula they use for longterm politcal markets, but they couldn’t provide it.
2) Yes maybe you could but Intrade may not have the luxury of exposing themselves to “pretty far fetched” scenarios.
3) Yes, but this comes back to my first point. That legal risk might cancel the 3% or whatever Intrade pays for $20k+ deposits. (It does seem like a non-US trader would take advantage of this though. Chris, how many non-US traders do you estimate Intrade has?)
4) Yes, the two pieces of the trade will converge when the market becomes reasonably sure who the candidate will be, so this will take 9-12 months, not 18 months, although i did only use a one year rate before.

I really have no disagreements per se though. My gut reaction was just that it’s hard to extrapolate anything general from these prices about manipulation, etc (while seeing so much brainpower thrown at it) with the legal situation as it is. If it is one manipulator, the unfettered pockets (so to speak) of everyone else should overwhelm him or her.

]]> By: Eric Zitzewitz http://www.midasoracle.org/2007/05/30/manipulation-can-affect-prices/#comment-15688 Eric Zitzewitz Wed, 30 May 2007 22:08:00 +0000 http://www.midasoracle.org/2007/05/30/manipulation-can-affect-prices/#comment-15688 Jason, Five thoughts: 1. If you have the margin feature on your account, you would only have to hold $1 against the long DEM and $3.77 against the short HC/AG/BO/JE position, for $4.77 total, not +/- $9.47. 2. It's possible you could get a better deal from Intrade, given the intent of the trade. The only way it would lose is if HC, AG, BO, JE run and win as an independent, which is pretty far fetched for those 4. 3. I think Intrade pays interest for large enough balances. 4. Planning to hold to expiry is a worst case scenario; market efficiency may reassert itself in the meantime and then you could unwind. 5. If one doesn't insist on pure arbitrage, one could just take the one position that offered the best expected value-to-funds tied up tradeoff. Jason,

Five thoughts:

1. If you have the margin feature on your account, you would only have to hold $1 against the long DEM and $3.77 against the short HC/AG/BO/JE position, for $4.77 total, not +/- $9.47.

2. It’s possible you could get a better deal from Intrade, given the intent of the trade. The only way it would lose is if HC, AG, BO, JE run and win as an independent, which is pretty far fetched for those 4.

3. I think Intrade pays interest for large enough balances.

4. Planning to hold to expiry is a worst case scenario; market efficiency may reassert itself in the meantime and then you could unwind.

5. If one doesn’t insist on pure arbitrage, one could just take the one position that offered the best expected value-to-funds tied up tradeoff.

]]> By: Mike Linksvayer http://www.midasoracle.org/2007/05/30/manipulation-can-affect-prices/#comment-15687 Mike Linksvayer Wed, 30 May 2007 21:40:57 +0000 http://www.midasoracle.org/2007/05/30/manipulation-can-affect-prices/#comment-15687 The underlying problem, if there is one, is Intrade's primitive (non-combinatorial) technology. The underlying problem, if there is one, is Intrade’s primitive (non-combinatorial) technology.

]]> By: Jason Ruspini http://www.midasoracle.org/2007/05/30/manipulation-can-affect-prices/#comment-15686 Jason Ruspini Wed, 30 May 2007 21:34:57 +0000 http://www.midasoracle.org/2007/05/30/manipulation-can-affect-prices/#comment-15686 <p>I posted this comment to MR too. I could be wrong on the margin calculation, but I don't think the basket trade and PRES(Dem) would be considered identical by Intrade despite that being the implicit intent of the trade.</p> <p>"First, a lot of liquidity is being artificially blocked from Intrade because of the legality situation. I for one maintain only "beer money" there because of this.</p> <p>Second, right now it looks like you could sell PRES(Clinton|Obama|Edwards|Gore) for 62.3 and buy PRES(Dem) for 57. I would guess the required margin on this would be 37.7 (worst case scenario for the individual basket sale) + 57 (worst case scenario for PRES(Dem)), so even before transaction fees, you are looking at a 5.3 gain on 94.7 total margin over one year out?? That could just be a result of discounting. You can make 5% risk-free in that time."</p> I posted this comment to MR too. I could be wrong on the margin calculation, but I don’t think the basket trade and PRES(Dem) would be considered identical by Intrade despite that being the implicit intent of the trade.

“First, a lot of liquidity is being artificially blocked from Intrade because of the legality situation. I for one maintain only “beer money” there because of this.

Second, right now it looks like you could sell PRES(Clinton|Obama|Edwards|Gore) for 62.3 and buy PRES(Dem) for 57. I would guess the required margin on this would be 37.7 (worst case scenario for the individual basket sale) + 57 (worst case scenario for PRES(Dem)), so even before transaction fees, you are looking at a 5.3 gain on 94.7 total margin over one year out?? That could just be a result of discounting. You can make 5% risk-free in that time.”

]]> By: Chris. F. Masse http://www.midasoracle.org/2007/05/30/manipulation-can-affect-prices/#comment-15685 Chris. F. Masse Wed, 30 May 2007 20:25:01 +0000 http://www.midasoracle.org/2007/05/30/manipulation-can-affect-prices/#comment-15685 <p>Justin Wolfers wants to know<br /> http://www.marginalrevolution.com/marginalrevolution/2007/05/justin_wolfers_.html</p> Free Money, Going Fast http://www.overcomingbias.com/2007/05/free_money_goin.html Justin Wolfers wants to know
http://www.marginalrevolution......fers_.html

Free Money, Going Fast
http://www.overcomingbias.com/....._goin.html

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