OBAMACARE PREDICTION MARKET WAS BRIEFLY MANIPULATED YESTERDAY EVENING SO IT WOULD ARTIFICIALLY CLOSE AT $35. – [CHART]

Posted on March 17, 2010 by Chris F. Masse

IT IS NOW BACK TO ABOVE $60.

See Jason Ruspini’s comment. UPDATE: Carlos Graterol. Joe Weisenthal. Gawker. Max Keiser.

Prediction Market Chart

ADDENDUM

More info on health care reform on Memeorandum and Politico.

About Chris F. Masse

Founder and President of Midas Oracle
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11 Responses to OBAMACARE PREDICTION MARKET WAS BRIEFLY MANIPULATED YESTERDAY EVENING SO IT WOULD ARTIFICIALLY CLOSE AT $35. – [CHART]

  1. Max Keiser says:
    March 17, 2010 at 11:51 AM

    as i reported on my show this week – these markets are routinely manipulated and it’s easy to do.

  2. Max Keiser says:
    March 17, 2010 at 12:01 PM

    based on the volume patterns on the chart above – it appears as though the buy/sell volume imbalance ratio (that generates an uptick/or downtick) on intrade’s CDA tech. – was adjusted to overweight sell orders.

  3. Jason Ruspini says:
    March 17, 2010 at 12:31 PM

    There is no overweighting of sell orders. This isn’t an automated market maker. The market was just thin, and someone did this with only 65 lots. At the time of the move, $100 of margin could move the price about -7% vs. -2.5% at more liquid times. I know this because I had a feeling that the contract could get interesting this week and happened to start my monitoring program (the same one mentioned in the below post) last night, 4 hours before the move.

    http://riskmarkets.blogspot.com/2008/10/intrade-offers-explanation-of-strange.html

  4. Max Keiser says:
    March 17, 2010 at 1:35 PM

    if the orders are coming from inside InTrade – this is effectively the same thing as rigging a CDA

  5. Jason Ruspini says:
    March 17, 2010 at 1:49 PM

    There is no reason to believe that the trades were coming from Intrade. Why would they make their own market look like a sham when people like Krugman are taking it seriously and this possibly could have been one of the best PR stories for them in some time?

    Intrade should address this incident and suspend the account of whoever did this.

  6. Max Keiser says:
    March 18, 2010 at 4:04 AM

    Greed.

    InTrade is as greedy as any firm on Wall St.

    This stunt drives lots of commissions. It also drives awareness, which in turn drives lots of commissions. This is broker/dealer churn.

    InTrade is no different than any other player in the Rigged Market Capitalism system – we see playing out in all currencies – including virtual currencies.

    I asked John Delaney and his tech. team when I was doing my due diligence on InTrade a couple of years ago in Dublin – about the firm’s own participation in making markets – and the potential to ‘manage’ prices in ways that were outside of the normal price discovery mechanism. I came away from that meeting not convinced at all that adequate checks and balances were in place to protect against manipulation.

    No one doubts this market has been manipulated. Your cry to, “suspend the account of whoever did this” sounds like the equivalent of, “round up the usual suspects.” Take the blinkers off, the answer is staring at us.

    We know who is behind this . . . .And I am Shocked! Shocked! I tell you.

  7. Niall O'Connor says:
    March 18, 2010 at 4:38 AM

    Why comment on manipulation in “the illiquid, Ireland-based, un-regulated InTrade prediction markets”? What is the significance of this manipulation …ah, like none …..

  8. Chris F. Masse says:
    March 18, 2010 at 4:42 AM

    The “illiquid” adjective referred to the *UK* political markets on InTrade —not the *US* political prediction markets.

  9. Jason Ruspini says:
    March 18, 2010 at 9:41 AM

    “Take the blinkers off”, to which the response is, take off the tin-foil hat!

    I don’t claim to know Intrade’s long term strategy, but c’mon Max, that’s just not in their self-interest, even if it somehow spurred commissions in the short-term.

    Occam’s Razor. Lone gunman.

    And Niall, if the media is citing the market, it’s important, or at least should not be completely ignored.

  10. Marcus Shea says:
    March 24, 2010 at 2:21 PM

    Here’s the most likely scenario as to what happened here:

    Somebody had a decent short position. Say they had about 65 shares (the volume bars indicate that this was likely a < 100 share transaction, ie, < $5 worth of commissions for Intrade, so mentioning commissions / greed as a motivator is pure ignorance). They wanted to put up a buy of 65 shares at say 5%, so that if the price ever dips that low, they can close their short position and wind up with a nice profit. And then, big mistake, they hit sell instead of buy. The market plummets. Mystery solved. It's called human error.

  11. Chris F. Masse says:
    March 24, 2010 at 3:16 PM

    Allegedly, an idiot pressed the wrong button on March 16’s InTrade ObamaCare prediction market. Do you buy it?

    http://www.midasoracle.org/2010/03/24/march-16-2010-intrade-obamacare-prediction-markets/

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