My dear honorable Carlos Graterol,
I acknowledge you are a little InTrade fanboy, and that flies OK in my book. You say there are 3,000 daily transactions on the daily DJIA prediction markets. (It was much higher than that before the CFTC fined InTrade.) While I reckon that this liquidity is enough to generate trustworthy predictions, it is very small compared to the liquidity of the financial markets or BetFair’s liquidity. For your information, BetFair handles more transactions than the London Stock Exchange. InTrade’s liquidity is small compared to BetFair’s, and is certainly too small to generate profitability. That’s what counts.
BetFair handles *more transactions* than the LSE?! Citation please?
Chris, you’re comparing the liquidity of InTrade *financial* markets to *all* of Betfair’s markets.
Do you have any data on the liquidity of Betfair’s *financial* markets? If not, then the comparison above is irrelevant.
I just looked at Betfair’s DJIA markets, and they look a bit anemic. There’s about £6000 in volume, but that looks to be a small number of large trades. Based on that quick glance, it’s very possible that InTrade may have more liquid financial markets than Betfair.
http://www.midasoracle.org/2007/08/23/does-betting-exchange-betfair-handle-more-daily-trades-than-the-new-york-stock-exchange/
Jed, your comment is pertinent. However, my original remark (in that other post) was that InTrade’s financial prediction markets have too little liquidity.