As I wrote many times, the prediction markets on the resignation of CEOs or politicians do not work very well, because secrecy prevails, in most cases. (I don’t have the deep link, but I do remember Emile Servan-Schreiber of NewsFutures making a similar comment recently, on Midas Oracle.)
In passing, this failure reminds me that the biggest lie that the prediction market pushers propagate on the Web is that real-money prediction markets attract insiders’ information. You see clearly, once again, that that it is not the case. It is a lie aimed at fuzzing the big picture, namely that the InTrade-TradeSports (and BetFair) traders always react upon published breaking news.
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Tip via mister Jason Ruspini
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Does somebody know why InTrade hasn’t expired the contract already (3:40 am ET this Tuesday)?
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Here’s the historical chart, but it hasn’t computed the latest movements (see above).
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Resignation of Jerry Yang as Yahoo CEO
Jerry Yang to resign as CEO of Yahoo on/before 31 Dec 2008
This contract will settle (expire) at 100 ($10.00) if Jerry Yang announces his resignation or retirement as CEO of Yahoo before 11:59:59pm ET on the date specified in the contract.
The contract will settle (expire) at 0 ($0.00) if Jerry Yang has not announced his resignation or retirement as CEO of Yahoo before 11:59:59pm ET on the date specified in the contract.
Expiry will be based on official public announcements, as reported in three independent and reliable media sources.
A resignation or retirement does not have to result in Jerry Yang actually departing as CEO of Yahoo by the date specified in the contract. The contract will expire when the resignation or retirement is announced, regardless of when it takes effect.
If Jerry Yang is fired from his position then the contract will expire at 0. An announcement of a resignation or retirement is required for an expiry of 100.
The contract will not be expired if a tendered resignation is not accepted.
In the event of Jerry Yang’s death the contract will be declared void, all trades will be reversed and all trading fees refunded.
Due to the nature of this contract please also see Contract Rule 1.7 Unforeseen Circumstances.
The Exchange reserves the right to invoke Contract Rule 1.8 (Time Protection) if deemed appropriate.
Any changes to the result after the contract has expired will not be taken into account – Exchange Rule 1.4
Please contact the exchange by emailing help@intrade.com if you have any questions regarding this contract before you place a trade.
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HubDub:
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UPDATE:
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Chris: You might be right. But how much financial incentive do you think is required to open an Intrade account, given the confusion and risk of trading on Intrade in the first place? I see that 1282 YANG.RESIGN contracts traded, which suggests that someone could have made a few grand.
I have a theory that somebody else was pushing this contract down for reasons other than profit. Someone long YHOO, perhaps?
Maybe we’ll never know. However, once the profit possibility clears $20,000 or thereabouts, I think we’ll have a lot more interest in these contracts, and that will attract insiders. I already know of lobbyists and campaign strategists who actively trade Intrade, and make money.
“But the Intrade prediction market failed to foretell us that”
Based on what, a data set with only one item ?