Republican Scott Brown has become the Senator-elect from Massachusetts.
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Tag Archives: InTrade
InTrade servers were down on Mass. election night.
– “-Unbelievable.”-
– “-this is terrible”-
– “-Absolutely pathetic Intrade.”-
Were some reactions by the event derivative traders.
Prediction market blogger quits InTrade.
New Year Update
Posted by Jesse Livermore on Sunday, January 3, 2010
I’-ve been gone for a while. There just hasn’-t been that much happening on Intrade, and I’-ve been focusing on neuroscience.
Intrade has definitely gotten tougher over the past year. I think the 2008 election drew in a lot of people who weren’-t very good at politics or gambling. By now those people have either lost their money or gotten better. Hopefully the 2010 elections will draw in a new crop.
In the mean time, Intrade’-s management has not done a great job in developing the brand. My impression is that volume is off by more than 50% compared to last year. Chief difficulties:
– Absolutely no advertising whatsoever.
– Diminished interest in politics in an off-year.
– Getting money onto the site requires a lot of determination and a visit to a gas station to buy a Netspend card.
Future updates on this blog will be less-than-daily, basically when I have an opinion about politics that I feel like sharing.
InTrade has a higher PageRank than BetFair. No change.
Google has just updated its external PageRank servers. (The PageRank is updated internally in a continuous way, but Google updates its external servers once a quarter or so.)
– InTrade is 7/10. BetFair 6/10. HSX 6/10. HubDub 6/10.
– BetFair’-s blog (Betting @ BetFair) is 5/10, proving, once again, that it is a mediocre publication run by mediocre people. BetFair’-s second blog (BetFair Predicts) is 4/10. Midas Oracle is 6/10.
– For the record, the goal to attain (for both exchanges and publications) is 7/10.
InTrade CEO John Delaney refused to improve the fairness of the trading on his Ireland-based event derivative exchange.
InTrade —- US.GOVT.HEALTHPLAN.DEC09
One InTrade trader, in October 2009:
The four re-definitions that have (so far) been necessary during the 3-month life of the US.GOVT.HEALTHPLAN.DEC09 contracts have brought to my attention that Intrade, to the best of my knowledge, does nothing to notify members that contracts they own have been “-clarified”-. It may be coincidence that volume on this contract spiked upward on July 29, Septeber 5 &- 10, and October 9 following rule changes on July 28, September 4 &- 9 and October 9. I suspect, however, that some members were aware of the rule changes while others with open orders found out about them later. While avoiding such ambiguous contracts would be preferable, some system should be in place to ensure that the unexpected need to revise contract definitions does not provide certain members with an unintended advantage.
Among the possible changes that I feel would improve this situation are the following:
1) Post a notification in the “-News”- whenever existing contract definitions are changed.
2) Notify all members with current positions and/or orders in a given contract whenever rule changes are posted.
3) Halt trading for some period of time after each change to allow members equal opportunity to respond to these changes, rather than providing an advantage to anyone who might look back at the contract specs or read their email first, including anyone who might know to look for a change after requesting the clarification from Intrade.
4) Add an asterisk or other indicator beside the contract summary on the trading screen, so that members interested in that contract will know that the contract definition has been changed. Ideally, the date of this revision should be included.
5) Add whatever changes among the above are instituted to Rule 1.7.
Changes 1), 2) and 5) seem like common sense to me, but perhaps others will disagree. In any case, I look forward to other exchange members’- comments on all of these suggestions.
The same trader, in December 2009:
Well, six weeks have passed since Mr. Delaney’-s assurance that this issue would be addressed “-ASAP”-. Unless I have somehow missed being notified of the policy change , it seems clear that the status quo is fine by management.
All I can do to attempt to encourage Intrade to take seriously the ambiguities in certain contracts is:
1) liquidate all my positions in such contracts,
2) avoid trading any potentially ambiguous contracts,
3) attempt to warn other traders about contracts that may be potentially ambiguous.
In particular, I will certainly stay away from any contracts involving U.S. legislation.
I could instead try to anticipate specific improvements that would help minimize ambiguities. However, if Intrade management cannot be bothered to address this issue even in a broad way, I think that it would be counterproductive for me to apply the occasional Band-aid. Discouraging other traders from becoming entangled seems more productive.
Nate Silver: InTrade is dumb. We need serious exchanges for event derivatives.
But Intrade, although it’-s a product I greatly appreciate, has some problems when it comes to efficiently pricing futures. It’-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’-t true for the stock market. And because of network effects, it’-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’-s likely that trading volumes are depressed by some multiple of that.
The health-care debacle on InTrade
[The Intrade event derivative traders] “-are getting more and more alienated by the actions and judgments of Intrade’-s management.”-
Is InTrade mis-managed? Many people are starting to think so, apparently. Still think that Chris Masse of Midas Oracle is too much critical of InTrade, my dear Chuck?
2009 New Jersey Gubernatorial Race: Was Nate Silvers prediction more accurate than InTrades?
Nate Silver’-s prediction (November 2, 2009): “-I’-d make Christie about the 4:3 favorite.”-
[ UPDATE: Nate Silver’s prediction post-mortem on the 2009 US elections.]
You can see that days before Elections 2009, InTrade was too heavy on Corzine:
Share This:
What creates prosperity is limited government. – Dixit John Stossel.
John Stossel (spot the intro where he says he loves InTrade):
If Michael Giberson is wrong, then that means that Chris Masse is right.
I donta€™ know that you could say Chicago was the a€?weakest linka€?, just because it got dropped first in the voting. The political process caused it to go early. However, Michael Giberson is wrong to imply that the prediction was accurate on the basis that Chicago and Rio were fairly close. Leta€™s keep in mind that the options are about as discrete as they come. Even if Chicago were to have come in a close second, it would have been a complete miss by the market.
If one needed to make a decision that depended on whether Chicago would win the bid, the prior choice would have been completely wrong, once the true outcome was revealed.
I have to agree with Chris. The market participants did not possess a sufficient level of information completeness to arrive at the correct prediction. Furthermore, the discrete nature of the outcomes made it a risky prediction. Finally, Ia€™m guessing that few, if any, of the IOC voting members were involved in the prediction markets, leading one to conclude that all (or almost all) of the market participants were a€?noisea€? traders.
Elsewhere, another commentator claimed that, because the prediction market started to show Chicagoa€™s share falling during the morning of the vote, this was evidence that prediction markets work. Hardly. It does show that prediction markets rarely provide accurate predictions sufficiently in advance of the outcome, in order for useful decisions to be made.
The prediction market industry really needs to investigate the determinants of success and which types of markets (issues) have the potential to provide consistently accurate predictions. Way too much time and effort is being spent arguing about meaningless markets, trivial questions, and false accuracy claims.
–
Previously: Chicago wona€™t have the Olympics in 2016.
ADDENDUM:
– BetFair’-s event derivative prices:
– InTrade’-s event derivative prices:
– HubDub’-s event derivative prices:
