Nate Silver: InTrade is dumb. We need serious exchanges for event derivatives.

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Nate Silver:

But Intrade, although it&#8217-s a product I greatly appreciate, has some problems when it comes to efficiently pricing futures. It&#8217-s hard to get money into the site. The exchange falls into a legal gray zone. Transaction fees are comparatively high. And Intrade is stingy about paying interest on deposits, which adds a cost to having your money tied up. Not that many people have heard of Intrade, moreover, which isn&#8217-t true for the stock market. And because of network effects, it&#8217-s likely that volume/liquidity is somewhat nonlinear with respect to the number of participants in the market. So if these encumberances reduce the number of participants by, say, a factor of 10, it&#8217-s likely that trading volumes are depressed by some multiple of that.

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