Dividents replied by mpa5220 @ Fri, 25 Jan 2008 01:58:21 -0000

mpa5220 — Fri, 25 Jan 2008 01:58:21 -0000

The suggestion for adding dividends for long term markets would have the effect of creating an investment incentive in the long term markets to compensate for Inkflation. Instead it seems the focus should be on stopping Inkflation.

Dividents replied by wstritt @ Wed, 24 Oct 2007 22:55:21 -0000

wstritt — Wed, 24 Oct 2007 22:55:21 -0000

My thought on the moderator really was more focused on trying to ensure that the market was set up such that trading was suspended before the results were known. In other words, for individual games, ensure the market is set up to automatically close before the known start of the game. The formula 1 market, for example, was set up that way – trading closed shortly before the event started. Some markets with multiple outcomes would be more difficult to do that with. Still trading on college football, for example, could be suspended every Saturday until results are known. Having not run a market, I don’t know if that is even possible…but it is a thought. Making it easier for the moderator to be able to figure those things out would be helpful as well.

With respect to the margin comment, my thought in your example would be rather than having to reserve 350 inkles, you could meet that requirement by having maybe at least 700 inkles in “value” of other stocks in your account allowing you to put that 350 to work elsewhere. Set it up with automatic margin calls/liquidation of positions should the excess value fall which is the risk shorts or any margin player takes anyway.

In my Argentina example, the stock should be at 0 but is ~8 at the moment. However, to get at those 8 inkles, one has to completely tie up 92 which will probably happen the day the stock closes (or if a millionaire choses to impose discipline) but, for the reasons noted above, probably not before then. I might be able to personally drive it to 0 if the “value” of my other investments were considered but I’m not interested in tying up more inkles until the market closes on Monday when I can make inkles in the meantime in other markets.

You may be right about the wisdom of handing out more at the start but without enough liquidity it is tough to stimulate more active trading. I do like your limits by the way, but unless there are more traders and/or activity, the markets will tend to remain inefficient (though the inefficiency in itself may encourage more trading with just some of your suggested limits).

Dividents replied by ednique @ Wed, 24 Oct 2007 08:14:59 -0000

ednique — Wed, 24 Oct 2007 08:14:59 -0000

Even though my thoughts were written with being a marketplace manager of my own in mind, I agree on the problems you arise concerning the inklingmarkets market place.

Indeed at inklingmarkets, closing a market is a huge problem but the moderator can’t possibly know all events happening around the world.
Therefore I suggest to force a market owner to add a URL of reference when creating a market. As such the moderator can go to that URL and verify closing and possible stocks.
Next I would suggest to add an extra page to the wizard to create markets that is specially dedicated to closing the market. Asking the market owner several dates for closing the market upfront will have a smoother experience for traders. Several dates are required for markets like tournaments where stocks are closed at $0 when a team loses a game.
I also suggested somewhere here on the forums to add timezones to the system so that market owners do not have to calculate their time agains the time of the site.

Payout is another problem that needs to be dealt with. If a trader has won, he doesn’t like to wait for weeks to be payed out…

We have to make the trading experience as good as possible so that more traders stick around and keep trading…

The initial amount of inklings is indeed a problem… After a couple of minutes all my money was invested on only a few stocks. I even didn’t know yet that I have to carefully look at the closing date so my money isn’t blocked for a too long time… As such I had no more money to spend and I had to wait a long time for results… This will force a trader to leave the marketplace and “forget” to come back…
The first 2 of my suggested investment limits could have solved my problem as I would have been investing less money on a single stock and market, leaving me money to invest some more.
I do not believe that giving more money is the answer because that will result in some more investing whithout thinking and experience when I start.

The “going short” solution you give won’t change a thing. If you go short on a stock that is worth $30 and you sell 5. $150 will be deposited in cash and $500 reserved which is the same as reserving $350 like you suggest…

Dividents replied by wstritt @ Wed, 24 Oct 2007 03:01:55 -0000

wstritt — Wed, 24 Oct 2007 03:01:55 -0000

The basic problem is a combination of 1) there are not enough traders and not enough depth in the markets to make them truly efficient and 2) given how some of the markets are run (e.g. not closed until the result is known) there is too much “free money” available in the short run to make participating in longer markets attractive almost irrespective of the “interest rate” one might pay.

I’ve not been though most of the markets but there is at least one I am participating in that is essentially a lock to more than double in price within the next 6 months however the payout is at least that far away. With the ability to more than double ones money over a weekend by doing football or baseball games in the 4th quarter, 9th inning or even after the game, given limited inkles to invest, what is the point of investing in a longer market? Coupled with the large tie up of inkles if you want to short makes it even harder to play long term markets if you think the positve answer is wrong.

Heck, there is a market asking whether the current President of Argentina will be re-elected. The guy isn’t even a candidate, and hasn’t been one for months. I suppose he could encourage a massive write-in campaign that might turn the tide, but his wife, who is the leading candidate and his presumptive political heir, would probably be pissed. An efficient market would have pounded that baby down to ZERO months ago. Admittedly the question was posed in Spanish but anyone that found this site can probably find babelfish and any search on the name would tell you the answer to the question posed. I’d drive it to close to zero (I’ve contributed to its decline) if I had unlimited resources but I don’t have the inkles to do it. I’d rather go with the quick pops.

Which leads to a couple of suggestions:

- go with investment limits suggested by ednique which would at least stop the concentration of resources in short term “sure things”
- have the moderator ensure that markets are set up to halt trading before sporting events begin, before election day, when the stock price is within 5% of target – in general before the outcome is reasonably certain. (Some market makers do a nice job of this in market design – some don’t close out markets until days ater the result is known).
- combine the above with giving people more inkles to begin with to stimulate more active trading.
- change the short rules to some kind of margin requirement rather than “inkle reserve” difference between 100 and the price.

All of these things might encourage more participation in longer term markets, while the last three should tend to make the markets actually more “predictive” rather than a game of who has the fastest internet connection to sell 50 shares of “LSU goes undefeated” in the final seconds of the game.

Dividents replied by ednique @ Tue, 09 Oct 2007 11:41:47 -0000

ednique — Tue, 09 Oct 2007 11:41:47 -0000

Very good remark onemike…
If P1 closes this week and cashes out $100 and P2 pays a dividend of $5 this week and closes next week cashing out $100, I think a trader would buy P1 this week and a similar as P1 next week…

Concerning the predictive value of the market I fear dividends will influence the market in a bad way.
If a stock is at $25 and a dividend of $5 is paid, the stock goes down $5 to $20. If there are other stocks in that same market that do not get a dividend, their value will increase. As such the market gets flattened out after dividend.
Offcourse, people can trade again, but the results as before the dividend isn’t there anymore…

The only thing that is left in order to increase trading in long term markets, is setting more rules on how traders can invest their money.

set limits on money invested in a single stock as a % of their assets.
set limits on money invested in a single market as a % of their assets.
set limits on money invested in 1-week-markets as a % of their assets.
set limits on money invested in 2-week-markets as a % of their assets.
set limits on money invested in 3-week-markets as a % of their assets.
They could still avoid long term contracts and keep more savings…

Dividents replied by onemike @ Tue, 09 Oct 2007 02:02:10 -0000

onemike — Tue, 09 Oct 2007 02:02:10 -0000

Dividends or ‘interest payments’ of some sort would encourage participation in longer term markets.

I wonder what discount rate or inflation rate would be appropriate if interest were to be paid on account balances. If some sort of return was paid for holding a long position in a contract, would a short position similarly be paid a return or would the short position be charged?

I’m not sure about the economic issues and how they work out.

Some basic analysis might go: assume a trader has a balanced position in two contracts (balanced meaning trader’s prediction = existing market price for both contracts P1 and P2) one which expires in one week and the other which expires in two weeks, next, assume new information about the later contract such that the trader now expects the price to become P2+X. How big does X have to be to induce a trader to sell contract 1 to fund additional purchases of contract two? I.e. how much return next week will a trader give up to get a larger return in two weeks?

In principle it seems possible to set up such pairs of markets and then infer the amount X from trader behavior.

Knowing this amount doesn’t answer the question of whether it would be helpful to pay dividends or interest on longer term markets, but it would be one thing you would want to know.

Dividents replied by ednique @ Mon, 08 Oct 2007 11:48:05 -0000

ednique — Mon, 08 Oct 2007 11:48:05 -0000

It seems that short term markets have very active trading but the long term markets (almost) nothing…
As such I think that paying out dividents could help increase trading in those markets.

If one would receive for ex $5 each week, he will probably trade in a market that lasts a year. If not, his money will be blocked during a whole year and he won’t trade in that market…

How this would work, I don’t know, but I thought that you could allow the market owner to pay divident to a single or all stocks in a market.

If you have a market about a championship, you could award each team that wins a game $5 divident. Or if you are guessing a date, $5 each week the event has not been taking place.

As in normal stock markets, when paying dividents, the stock price is lowered accordingly.
Once again other traders could as such see new opportunities in a stock after devident.

As I’m not a specialist on the subject I have no clue what paying dividents mean in prediction markets in terms of their predictive corectness…

Timezones replied by nate @ Mon, 01 Oct 2007 14:56:27 -0000

nate — Mon, 01 Oct 2007 14:56:27 -0000

Good point. We’ll consider it some more.

Timezones replied by ednique @ Mon, 01 Oct 2007 07:50:59 -0000

ednique — Mon, 01 Oct 2007 07:50:59 -0000

If you want to close your market at a certain date/time and your inkling server is in another timezone, it makes it difficult to recalculate the times each time; let alone remember to recalculate it…

At the minimum a Marketplace Manager should be able to define its default timezone.

After that, the profile of each user could contain a timezone setting as well.

copy market replied by nate @ Sun, 30 Sep 2007 20:24:12 -0000

nate — Sun, 30 Sep 2007 20:24:12 -0000

Yep, you got it, it’s already in the queue.

copy market replied by onemike @ Sun, 30 Sep 2007 04:03:06 -0000

onemike — Sun, 30 Sep 2007 04:03:06 -0000

Sounds like a good idea. I can’t imagine that the folks that run baseball markets are looking forward to entering all 30 teams into next year’s World Series and Playoffs markets. A copy command would assist.

(Plus, it is probably a feature your corporate customers would appreciate, too.)

copy market replied by ednique @ Sat, 29 Sep 2007 13:17:52 -0000

ednique — Sat, 29 Sep 2007 13:17:52 -0000

Some markets seem to reoccur… every month, quarter, year, ...

As such it would be nice to copy an existing market en just edit the changes like stock names and initial prices…

I don’t think this is too hard, but I would really appreciate such a feature…

Using charts and graph widgets posted by onemike @ Sat, 04 Aug 2007 20:56:52 -0000

onemike — Sat, 04 Aug 2007 20:56:52 -0000

I’ve tried a couple of times to use the Inkling market widgets to put the chart or graph in blog posts, but so far have not been successful. One blog I’ve tried uses WordPress and the other uses Movable Type. In both cases, nothing seems to work.

Does the blog have to be set to allow javascript? Is there some additional piece of code needed?

Anyone able to offer me some help? I want to be able to promote the MLS Cup market that I’ve set up.

type="text/javascript" 
src="http://home.inklingmarkets.com/market/widget/4780">

pretty URLs for markets posted by adam @ Thu, 05 Apr 2007 22:32:39 -0000

adam — Thu, 05 Apr 2007 22:32:39 -0000

We actually have this for marketplaces but not for individual markets. Interesting suggestion though; we’ll definitely keep it in mind…

Market managers should get free inklings! replied by dfeuer @ Sun, 18 Feb 2007 22:07:55 -0000

dfeuer — Sun, 18 Feb 2007 22:07:55 -0000

I agree with laxrulz777 that there should be some incentive for the market maker to set good initial prices. I’m no stock market expert, but it would seem natural to combine a disincentive for setting prices poorly (money generated by the market comes out of their account) with an incentive for making good markets (a transaction fee). There would have to be a way for the market maker to limit the number of shares they bought or sold. If the market maker set the prices poorly, and the market hit the limit, trading would most likely stop short, ending the transaction fees. Something like that, anyway.

Market managers should get free inklings! replied by char @ Thu, 16 Nov 2006 00:55:00 -0000

char — Thu, 16 Nov 2006 00:55:00 -0000

Eino is making a very good point: because managers can’t trade in their markets, they have a serious incentive not to open the markets they would be most interested in (and therefore probably run best).

Clearly we can’t have managers trade in their own markets today, but we might be able to come up with some rules that would let them do so fairly. For instance, what if they could trade in their markets after 48 hours and a certain (relatively high) volume? What if they could trade as they pleased but all their trades were public and open to complaint?

In any case, I like laxrulz777 and onemike’s ideas.

Market managers should get free inklings! replied by onemike @ Wed, 18 Oct 2006 15:34:50 -0000

onemike — Wed, 18 Oct 2006 15:34:50 -0000

Inkling could charge a small transaction fee in Inklings, and split it with the market manager. This would also, in a small way, absorb some of the inklings which otherwise flow into the system for every new account created.

Alternately, you could create a “Top Managers” board which rates managers by the volume traded on markets they create. Maybe this idea would result in too many people trying to create obvious markets (World Series, Superbowl, etc., all stuff that has been done before), and not enough thought into trying new things. But it seems like a relatively cheap “reward system” for creative managers, and may stimulate efforts to produce interesting markets.

New market publisher posted by adam @ Mon, 16 Oct 2006 11:46:24 -0000

adam — Mon, 16 Oct 2006 11:46:24 -0000

Just wanted to let everyone here know we pushed a new market publisher very late last night. It doesn’t add a lot of new functionality per se, but we think it really cleans up the flow of how a market is created (i.e. if you’re creating a one stock market you aren’t asked to enter market info and stock info). We would appreciate feedback as you begin to use it and definitely send us any bugs you find. Thanks!

Market makers choose the "granularity"? replied by laxrulz777 @ Fri, 06 Oct 2006 14:02:02 -0000

laxrulz777 — Fri, 06 Oct 2006 14:02:02 -0000

The big example now is the 3 month fed rate… it’s a very interesting market hampered by
1) high granularity relative to the price (.10 per share really matters when the price floats around 5.50)
2) low sales price in general (market at 5.50 means lower profit opportunities)

these two problems compound eachother…

Solutions::
1) Allow granularity at least down to the .01 level… this wouldn’t really solve this market but it might help
2) Scale the market differently… potentially it could have been set up as basis points, although I think that might have been too much and/or too confusing
3) Work the market as a double sided market in the “traditional way”... This really gets away from the inkling concept so I think it’s better to stay away from that.
4) Some other solution I haven’t thought of

Market makers choose the "granularity"? replied by onemike @ Fri, 06 Oct 2006 13:02:30 -0000

onemike — Fri, 06 Oct 2006 13:02:30 -0000

This is an old discussion, but here are a few thoughts.

Like laxrulz777, I’ve noticed a problem in markets such as the oil price or other cases (Hybrid auto sales is a current example) in which it is difficult to buy a reasonable size stake without moving the market an unreasonable amount. If the market it too high but only by a small amount, it would be nice to be able to squeeze out some profit. Hard to do if buying more than 5 shares exhausts the profit opportunity.

My general sense is that buying X amount of shares in, say, a two stock market, always moves the price the same amount, independently of the number of shares outstanding. (I don’t know if this is true, and haven’t tested it directly. It seems to be the case.) However, shouldn’t a purchase move the market more for stocks with fewer shares outstanding than for stocks with many shares outstanding?

I read elsewhere that Inkling relies upon Robin Hanson’s dynamic pricing formula, I guess I could go read up on it to get a little more insight on how things work.

Small But Often Requested replied by pconnny @ Fri, 04 Aug 2006 02:34:44 -0000

pconnny — Fri, 04 Aug 2006 02:34:44 -0000

Thanks for this enhancement; a great improvement (even if considered small).

Small But Often Requested replied by adam @ Fri, 28 Jul 2006 04:47:28 -0000

adam — Fri, 28 Jul 2006 04:47:28 -0000

Just wanted to let everyone know closed stocks can now be removed from your dashboard – this was our number 1 most requested change and we put it in today…Small, but hopefully those who trade in lots of stocks can get rid of some of the old stuff…

Renewing expired markets for a new trading period replied by pconnny @ Mon, 03 Jul 2006 12:50:52 -0000

pconnny — Mon, 03 Jul 2006 12:50:52 -0000

Adam

The first solution sounds fine. Just ‘copy’ the market and set new closing dates. That would be a big time saver, as [hopefully] it would also preserve URL links etc. Happy to re-set them manually by copying pieces from the completed section in the interim.

regards

Email reminders for new markets??? replied by adam @ Mon, 03 Jul 2006 12:22:07 -0000

adam — Mon, 03 Jul 2006 12:22:07 -0000

Paul,

Sounds like insider trading to me. :) However, it would be nice if you could send emails to your current traders of a market to tell them you’ve updated something, etc.

A huge to-do on our list is a comprehensive alert system to announce new markets, closing markets, stocks that need to be cashed out, etc. It’s coming, and hopefully will address some of what you’re talking about because I agree, more communicating out to traders on a regular basis will keep people interested/trading more which will help you guys, the market makers…

Renewing expired markets for a new trading period replied by adam @ Mon, 03 Jul 2006 12:19:40 -0000

adam — Mon, 03 Jul 2006 12:19:40 -0000

Paul,

This does not exist right now but we can think about doing something like it. There is a list in the “manage your markets” for your completes which I’m sure you’ve seen; perhaps we can add something there that allows you to “repeat” the market, which then would put it in your saved; you would then just have to change the ending dates on the stocks and any stock information you would want to change.

We’ve also talked about some sort of import function where you would import market data from excel or an XML file, but that’s a long way’s off…

Recent Posts in Feature Requests for DIY Markets | Beast

Dividents replied by mpa5220 @ Fri, 25 Jan 2008 01:58:21 -0000

Dividents replied by wstritt @ Wed, 24 Oct 2007 22:55:21 -0000

Dividents replied by ednique @ Wed, 24 Oct 2007 08:14:59 -0000

Dividents replied by wstritt @ Wed, 24 Oct 2007 03:01:55 -0000

Dividents replied by ednique @ Tue, 09 Oct 2007 11:41:47 -0000

Dividents replied by onemike @ Tue, 09 Oct 2007 02:02:10 -0000

Dividents replied by ednique @ Mon, 08 Oct 2007 11:48:05 -0000

Timezones replied by nate @ Mon, 01 Oct 2007 14:56:27 -0000

Timezones replied by ednique @ Mon, 01 Oct 2007 07:50:59 -0000

copy market replied by nate @ Sun, 30 Sep 2007 20:24:12 -0000

copy market replied by onemike @ Sun, 30 Sep 2007 04:03:06 -0000

copy market replied by ednique @ Sat, 29 Sep 2007 13:17:52 -0000

Using charts and graph widgets posted by onemike @ Sat, 04 Aug 2007 20:56:52 -0000

pretty URLs for markets posted by adam @ Thu, 05 Apr 2007 22:32:39 -0000

Market managers should get free inklings! replied by dfeuer @ Sun, 18 Feb 2007 22:07:55 -0000

Market managers should get free inklings! replied by char @ Thu, 16 Nov 2006 00:55:00 -0000

Market managers should get free inklings! replied by onemike @ Wed, 18 Oct 2006 15:34:50 -0000

New market publisher posted by adam @ Mon, 16 Oct 2006 11:46:24 -0000

Market makers choose the "granularity"? replied by laxrulz777 @ Fri, 06 Oct 2006 14:02:02 -0000

Market makers choose the "granularity"? replied by onemike @ Fri, 06 Oct 2006 13:02:30 -0000

Small But Often Requested replied by pconnny @ Fri, 04 Aug 2006 02:34:44 -0000

Small But Often Requested replied by adam @ Fri, 28 Jul 2006 04:47:28 -0000

Renewing expired markets for a new trading period replied by pconnny @ Mon, 03 Jul 2006 12:50:52 -0000

Email reminders for new markets??? replied by adam @ Mon, 03 Jul 2006 12:22:07 -0000

Renewing expired markets for a new trading period replied by adam @ Mon, 03 Jul 2006 12:19:40 -0000