Scarce liquidity in the financial prediction markets run by InTrade-TradeSports

Posted on October 30, 2007 by Chris F. Masse

The Daily DOW prediction markets are thin, and the Daily Nasdaq prediction markets are inexistent.

Here is the data for yesterday.

DOW:

DOW Oct 29, 2007

Nasdaq:

Nasdaq Oct 29, 2007

About Chris F. Masse

Founder and President of Midas Oracle
This entry was posted in Analysis (Accuracy & Precision), Exchanges & Markets, Market Expiry, Market Liquidity, Market Prices & Probabilities and tagged . Bookmark the permalink.

3 Responses to Scarce liquidity in the financial prediction markets run by InTrade-TradeSports

  1. Niall O'Connor says:
    October 30, 2007 at 4:41 PM

    Yes, it would seem that things must have taken a turn for the worse, since Justin Wolfers and Eric Zitzewitz wrote in “Five Open Questions About Prediction Markets” (page 7);

    “Beyond sports bettors, Tradesports has been quite successful at marketing its platform to those employed in financial markets, a pool of risk-acceptant traders.”

    It would be interesting to see what explanation they could give for this.

    I also noted in that paper that mention is made of a prediction market software company called Incentive Markets; could somebody clarify whether this is the same company;

    “As of Feb 2005, Incentive Markets is no a longer viable company, as stated by Carol Gebert, founder of Incentive Markets, during the Center for Discrete Mathematics & Theoretical Computer Science (DIMACS) Workshop on Markets as Predictive Devices (Information Markets).”

  2. Chris. F. Masse says:
    October 30, 2007 at 4:58 PM

    “It would be interesting to see what explanation they could give for this.” InTrade-TradeSports was fined by the US CFTC for floating event derivatives on commodities.

    Incentives Markets was a bit like Consensus Point or Inkling, a consulting firm and software vendor for internal prediction markets.
    http://www.linkedin.com/pub/0/20/753

  3. Jason Ruspini says:
    October 30, 2007 at 5:53 PM

    I’m not sure why someone would trade in those markets. I mean the answer is high leverage and low fees relative to your account size, but if you can’t fund a regular stock account should you be day-trading these markets??

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