Predictx's Blog

Nearly there….Launch on 13.10.2010

Posted in General Announcement by predictX on October 5, 2010

$1000, 5 months and many many sleepless nights finally pay off: PredictX is 80% ready.

What is predictX?
Generally speaking it is a hybrid of derivative trading (the outcome of events), skill gaming (no real money is traded) and youtube (everybody creates content).Users create events that either occur or do not occur (e.g. “Will Marihuana be legal in the European Union before 2020?”).
Users then trade virtual money on this event before the outcome is known. Those who believe the event is more likely than the current propability (e.g. 68%) buy “X will occur” contracts. Users who think the event occurs with a lower propability buy ” X ill not occur” contracts. By buying and selling contracts not only the market price but also your market value of held contracts changes. For instance if you have bought “X will occur” contracts and the propability that „X will occur“ rises you can either sell your trading position or wait until expiry. See our betting rules for examples and strategies.
As soon as the outcome is known each held contract pays off $1 or $0 depending on whether the prediction was correct (= $1 per contract) or incorrect (=$0 per contract).
Where is this going?
The current platform is a testing environment for out trading back-end. It is possible for users to trade at anytime even in markets lacking liquidity for instant order matching. The market maker generated matching offers by factoring in several dynamic parameters such as volumes, volatility and many more. If the technology proves tob e sustainable we will further develop the platform, develop APIs, Apps, integrate moneybookers, paypal etc. and switch to real-money. We provide the platform and take 10% commission.
Who needs this?
Trading: It is possible to trade on events in a more direct and simpler way than through financial derivatives (CFDs, Certificates, Indices). The stock-prices are not influenced by irrelevant other factors like financial assets. Also it can be used for diversification purposes effectively.
Hedging: Imagine you are the CEO of Marlboro and you want to hedge against political risks of a european-wide ban of cigarette advertisement. By creating the event X= „cigarettes will be banned“ you can simply trade that X will happen and receive $1 per contract if this happens.
Creating: Creating an event costs $20 (initial market maker funding) to ensure quality (all events are screened by us). In return, users receive 1% of the total trading volume. This provides the right incentives for users to create events with high trading activity.

Prediction markets have proven to generate more accurate forecasts on future events than single experts, polls or statistical models. Monetary incentives are rewarded for many individuals disclosing their beliefs on an event. The number of traders, insider knowledge and the fact that market prices are denoted in propabilities (e.g. market price per contract 0.76 = 76% propability that event will happen as every contract pays off $1 if correct) lead to predictions on anything. News sites, blogs, social media can easily integrate graphs, information and trading interfaces on other websites.

Where can I read more?

Marching on the road to launch…

Posted in General Announcement by predictX on September 15, 2010

3 months of developing, coding, and spending nights in the lab (aka basement) have passed. And still predictX isn’t ready. So what the bloody hell have we been doing?

The first version simply wasn’t awesome enough to see the light of public launch. We wanted more. So we went back to scratch and re-thought all elements of prediction markets. Unfortunately we neither had the financial resources nor the expert knowledge ourselfes to implement all intended featured. We did our very best to get most of our visions implemented though.

We will spend another full week on de-bugging, implementation of the back-end and getting everything ready for launch. The upcoming Oktoberfest make this a fairly challenging task – we do our very best to stay sober until 4PM.

Launch is scheduled for the end of September. Stay tuned.

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