Important! Please read before creating a market posted by laxrulz777 @ Thu, 05 Oct 2006 13:34:44 -0000

laxrulz777 — Thu, 05 Oct 2006 13:34:44 -0000

I’ve created (quick check through the records) 10 markets on inkling since they began to allow users to open markets… I’m probably not the most prolific market creator but I’m probably up there… Before you create a market, here’s some things to think about:

1) What’s my time frame going to be? Especially long markets don’t have a payout incentive like shorter term markets. They’re less active and generally less interesting. Really short term markets may not have the time to get up enough momentum.

2) What’s the “structure” of your market? Are your choices mutually exclusive (Will the Dow close Up/Down or remain the same?) such that you can guaranty that one of the possibilities will be correct? Or are there multiple choices (Which NFL teams will make the playoffs)? While it may be valid to structure a market like this:

Who will win the Republican nomination?
A, B, C or D?

It’s probably better to structure it like this:

Who will win the Republican nomination?
A, B, C, D or someone else?

The second allows you to use inkling’s functionality that smoothes out the market and guarantees that it’s in balance. But if you are going to structure it the first way, don’t use that functionality, you’ll only screw things up.

3) Do you have a clearly defined, objective criteria for determining payout? If your market is about a price point of an item on a specific date, specify close of business or opening bell for that date. If your market is even driven, make sure you clearly define the criteria for payout. I did a market for Bruce Arena to remain head coach through the end of the year. US Soccer announced that he would not have his contract renewed but he wasn’t, technically speaking, fired… In the end I was bailed out by the Red Bulls hiring him but it could have been trouble.

4) How are you pricing your market? Don’t feel compelled to have your various choices start out with even probability. You can weight them slightly one way or the other. Your goal in creating the market should be to provide a level playing field for all players. Not create a market that’s a windfall for early investors. If you create a market that has multiple winners (i.e. what NFL teams will make the playoffs?), make sure you price accordingly. In that example, if I was going to payout each team that made the playoffs with 100 inkles (which I hopefully specified ahead of time), then I should price the market so that it totals up to 1200 (12 teams x 100 inkles). If I don’t, then I create an easy opportunity for free money for the first person that notices the discrepancy.

5) Take your time and check your typing. It’s easy to make typos in a web interface that’s not spell checked. Just take 2 seconds to double check your wording.

6) Use images when you can. This is a nice feature that inkling provides, feel free to use it but don’t feel compelled to.

7) Create markets that you would be interested in. It’s okay to include niche markets but don’t expect them to be very active. What’s not okay is to create a market that you’re going to lose interest in. Remember, you’re accepting a responsibility to follow through when you create a market. Make sure you’re not going to lose interest.

8) Be ethical. Don’t create a market that’s out of whack just so your shadow account can reap the benefits. When (not if) inkling catches you you’ll get both accounts banned.

If anyone else has any other tidbits feel free to post.

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Important! Please read before creating a market posted by laxrulz777 @ Thu, 05 Oct 2006 13:34:44 -0000