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## StrategyPage's Prediction Market

"Many minds make quick work of uncertainty."

The StrategyPage.com Prediction Market is a game where you get to predict when events will happen and score points for predicting correctly.

Welcome to the BETA version of the game. We should be in beta until June 1st. Until that time you can participate for free.

Sponsor - The prediction market is being sponsored by Tom Clancy's Ghost Recon™. And over the course of the next few months we will be rewarding participants with Gold Editions of Ghost Recon™

The Market

If you look at the market page you will see that there are events followed by a date. The date is the date that the event will happen on or the date by which the event will happen. For example, if the event was “the Carolina Panthers will win the Super Bowl” then the date would be February 1, 2004. Another example could be “President Bush is re-elected”, then the date would be November 9, 2004.

To play the game you start out with a 1000 credits. You can then invest those credits in predicting that an event will occur by the date ( a Pro position), or invest the credits predicting the event will not occur by the date (a Con position).

Cost of a Con and Pro Futures

One future of a Pro or a Con position costs 1 credit. The value of a future is calculated in the following way:

Pro Future Value = (Con Futures + Pro Futures)/Pro Futures

Con Future Value= (Con Futures + Pro Futures)/Con Futures

Taking a Position

Once you buy at least one Con future for an event or one Pro future for an event you may only then buy futures of the same type. In other words you cannot hold both con futures and pro futures in the same event. You can hold Con futures in one event and Pro futures in a different event. You can only take a position in an event up to the day before the event expires.

Event Occurs or Event Expires

If an event happens on or before the date then the Pro position is paid out at the current value and the Con positions lose their investments. If the event does not happen then Con position is paid at the current Con value and the Pro positions lose their investment.

Amount of Shares Available

A limited number of shares are available when an event is released to the market. Currently that number is circa 5000 but as we increase the number of participants the initial number of shares will increase. The purchase that drives it over 5000 closes the market. Also, we are going to allow participants to trade with each other. We hope to have that feature ready soon.

Statistics

We keep track of two statistics that tell us how the Prediction Market is doing overall.

Correct At Close: When an event closes we determine if the prediction was correct or incorrect. For example, a correct Con result to occur the total of the Con shares would need to be greater than the total Pro shares and vice versa.

Correct Over Lifetime: Once it is determined that a Event was Pro or Con we can look back over the buying history and see on any given day whether an event was predicted correctly. For example Event A that closed on April 15th on March 1st had a total of 200 Pro shares and 300 Con shares that were purchased up to that time. The final result for Event A was Con. So, on March 1st the prediction is correct. To calculate the Correct Life Time percentage the total number of correct days is tallied and divided by the number of days the Event was on the market. All settled Event correct Over Lifetime calculations are then averaged to give us an over all percentage. It’s a bit complicated but it gives us a feel for how good a prediction was over its life.

It’s a Game

This is not a real market. There are no monetary amounts actually paid out. In order for us to allow trading with real money, we would have to  register our Prediction Market with the SEC. That would make the Prediction Market a lot more expensive (and time consuming, what with all that SEC paperwork) to run, and we would rather keep it inexpensive so that the maximum number of people can participate. So you'll never make anything playing this market but you will have a lot of fun, and learn something as well.

Create A Beta Account