# Pop Sci PredictionS Exchange

Note the plural at &#8220-predictions&#8221-.

FAQ:

What does &#8220-short&#8221- and &#8220-cover&#8221- mean?
You know the maxim &#8220-Buy low, sell high&#8221-? Well, if you think the price of a proposition will go down, not up, you can &#8220-short&#8221- that prop and make money as it falls. Here&#8217-s how it works: When you short a prop, you borrow shares and sell them to another buyer. Eventually you must repay, or &#8220-cover,&#8221- the shares you&#8217-ve borrowed, by buying more shares at the new (and hopefully lower) price and returning those shares to the lender. Your net profit is the difference in price between the shares when you &#8220-short&#8221- them and when you &#8220-cover&#8221- them. So not only can you buy low and sell high, you can short high and cover low.

The answer to the proposition I&#8217-m interested in won&#8217-t be decided until 2050. What gives?
Long-term propositions are an important part of the market. Even though the exchange in its current form (or the Internet in its, for that matter) may not even be around in 50 years to see a long-term prop finally pay out, you can still profit greatly from trading it because its price will always serve as an indication of whether or not the market thinks the proposition will eventually come true. Take the &#8220-Will Androids Defeat a Team of Humans in Soccer by 2050?&#8221- [link] proposition as an example. We won&#8217-t know the answer to this one for quite some time, but if next week, Honda were to demo its humanoid robot ASIMO&#8217-s amazing new ability to run and kick a soccer ball at the same time, the price of this stock is probably going to jump. And if you&#8217-re holding shares, you&#8217-ve just made some money.

What&#8217-s a limit order?
A limit order is a way to automatically buy or sell a given number of shares of a proposition based on its price, allowing you to make smart trades at the right strategic moment without having to keep an eye glued to the market at all times.

Let&#8217-s say a proposition you&#8217-re interested in has been fluctuating between POP\$50 and POP\$75. If you know you want to buy, but only when the price reaches the low end of where it&#8217-s been fluctuating, you can set a limit order for 100 shares at POP\$55. This means that the moment the stock&#8217-s price drops a penny below POP\$55, the market will automatically buy 100 shares of the stock for you. Same goes for selling: If you wanted to sell your shares near the high end, you could set a limit order to sell 100 shares when the price reached POP\$70. A limit order&#8217-s expiration date governs how long it will remain in effect-anywhere from one day to one month.

Previous blog posts by Chris F. Masse:

• 24 hours after the launch of the “Prediction Markets” group at LinkedIn, we have already 39 members —both prediction market luminaries and simple people (trading the event derivatives or collecting the market-generated probabilities).
• That was ubber world star Barack Obama in Berlin, during his July 2008 speech at the Victory Column. Spot all the digital cameras pointing to the socialist Messiah. Snatching something to bring at home — “see, I was there”.
• If you want your affiliation with the “Prediction Markets” group to appear on your LinkedIn profile, then click on “Edit Public Profile Settings”, and check the “Groups” option.
• If you want to connect with InTrade CEO John Delaney on LinkedIn…
• Do join the “Prediction Markets” group at LinkedIn, if you have a strong interest in the prediction markets or if you work in the prediction market industry. It’s free, and that’s a way for the LinkedIn visitors browsing stuff about prediction markets to stumble upon your resume / profile.
• You can now join the LinkedIn group on Prediction Markets.
• Nigel Eccles says that HubDub generates “data on peoples’ reputations for accurately analyzing and forecasting future events”.