Will the CFTC agree to license and regulate real-money Prediction Markets?
Chris F. Masse June 28th, 2008
Nigel, how is that you are going to judge this contract if, as expected, the CFTC rules that it “exempts” the US-based, real-money prediction exchanges organizing non-hedgeable event derivative markets? How are you going to interpret an “exemption”?
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Jason, my dear friend, did you think about that issue before plunking down 1,000 bucks on this prediction market?
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And how the f*** the probability is still negative with most of the money being on the “yes”? Is there something I haven’t computed???…
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% chance over time
Yes, and depending on how the exemption is worded, it might or might not be sufficient to expire the contract at 100. The CFTC already regulates event contracts in the form of payroll futures though!
@Jason Ruspini: “depending on how the exemption is worded”
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muddy
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“The CFTC already regulates event contracts in the form of payroll futures”
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not an exemption
@Jason Ruspini: U didn’t answer the price issue. Something to hide?
The question is muddy. With the payroll futures, I meant that those markets are arguably sufficient to already expire the contract at 100. Otherwise, I might change my opinion about exemptions and the contract.
The contract’s initial price was low, not 50%.
OK - Wordpress just killed my longer comment (grrr…)
If it is unclear then we would escalate the question on settlement for discussion. If it is felt that there is no clear answer then it would be voided.
@Nigel Eccles: “OK - Wordpress just killed my longer comment (grrr…)”
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I use WP Spam Free to protect the comments from spammers.
http://www.hybrid6.com/webgeek/plugins/wp-spamfree
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It’s better to log in first before making a comment here. That way, you bypass the anti-spam tool.
[...] for that, [...]
@Nigel Eccles: “Exempting” is in between “licensing” and “outlawing”.
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It’s in between.
[...] When there’s little trades (in this case, only 3), the last price/probability is too much dependent on the initial price set up by the exchange manager. [...]