HADRON-- Ready to short?

I side with Vulgarian on this one. This should be closed and paid out short.

i think it has been a short for a long time

For me, in a prediction market the payout only occurs on the closing date, never before. If new news is revealed which impacts the outcome of the stock, the market will naturally react to this news and players will adjust their position, which in turns causes the price to move.

The closing date is there for a reason, the payout is determined on that date. This is why I disagree with having ISHARE paid out early.

I know we've had these debates before and I've shown my position. I would like to get an official view from PPX saying exactly when stocks will be paid out early. Whatever it is, I have to play within it but I'd like to know what it is.

-NapkinG-

There is no provision for it to close early, even though we have already beat to death that it wasn't fully functioning, and even with news that it would not be ready for another test till possibly this spring. If there was a statement in the payout for an early close short then I'd be all over it. As it is written it can only close early if it closes long.

Napkin I respectfully disagree with your idea that in a prediction market the date sets the close. It doesn't nor should it. It should be closed based on the conditions outlined in the payout statement by x-date. Now some props can only close by their date (REDRAIN for example, or the mars lander). Others close by a condition being met, a well written stock could indicate both a criteria to close early based on a long outcome or a short outcome. If the problems inherent with this market were not happening, you would see the accuracy getting closer to either $100 or $0.00 as the event came closer to happening, or the end date came closer, even with stocks closing early due to meeting the criteria in the payout statement.

My problem for the most part is when things close early when there is no condition to do so in the payout statement. I say this even when it it means that people can buy a sure thing, but the integrity of the market place rests or following the language of the payout statement (be it good or be it bad). Now I made money on ISHARE (which is amazing since I didn't realize I was holding it) but if someone actually used apples SDK to enable phone to phone calls then this was rightfully closed.

ISHARE rightfully paid out if someone did develop an iPhone app for VoIP (I haven't read anything, but I'm sure someone did). End of February was a cutoff - the condition just had to be met by the end of February 2009.

I know it's highly unlikely (read: impossible) that the LHC will produce data within the next 10 days, but payout should still wait until the close date.

HADRON - Not Ready to Short

If you actually take the time to read the CERN incident report linked above, you'll see that the accident happened prior to a winter shutdown that was already scheduled.

It goes on to say that there are no plans to restart the LHC until it's scheduled resumption of operations next year.

It's toast.

roygbiv: i think fring in the app store is able to make VoIP calls...couldn't find anything else in the app store just now so it was probably paid out based on fring

napking: not sure why you think this shouldn't have closed...it seems to have satisfied the condition that an iPhone program was built using the SDK to make VoIP calls...once the condition is met, it should close. If the basis was on fring, this app was released a few weeks ago so it should have closed then. Why should it continue trading after the outcome is known?

Vulgarian, not challenging your research, or the fact that there is no way that HADRON will payout long. What I am saying is that since the payout statement does not indicate any conditions for the stock to payout early and short, it shouldn't do so. Its not an issue (and hasn't been an issue since ejcassel and everyone argued about hadron) of interpretation, or even what the scientists say (unless they indicated that they actually had it running and crashed particles and gathered information, then it would close long), its that the payout statement does not give any condition other than meeting the condition for it to pay long, in order to close early, it can close short only by the date indicated.

That's all I was saying as well, vulgarian. I know it will close short. But because there was nothing in the payout statement for it to close early, we should wait till the payout date.

Closing stocks early will (and already has) resulted in an elite level of daily (even hourly) players who are developing cutthroat tactics and philosophies to become competitive against each other while alienating lower ranked and less frequent players. These elite players are attempting to gain early access to their cash as well as to attempt to punish non-immediate players. The portfolio size of upper level players have become so large that their main method of gaining position is to trap their competitors holding the stock the wrong way, providing them with a large increase in cash and their competitor with a large decrease in cash. It results in a secretive and coniving community and eliminates the debate and discussions I enjoy most about the market. The true competitive advantage in a prediction market is to be holding at a more advantageous price once the payout date arrives or before a large jump when new news is released.

Many players quote the method in which the props are worded: "If X occurs by date Y then..." and interpret it as meaning a clause for early payout. I again disagree and interpret in a different manner: that when date Y arrives, the market administrators determine if X has already occured and the payout is contingent on that. In no other prediction market I have seen is the timing of the payout varried by the outcome. Other markets would wait for the world series to be completed and then payout for who won, or wait until day Y to see how much money the Dark Knight movie had made.

Now, PPX has developed different wording for their props by looking for a yes/no occurance of something which I am fine with; PPX is not other markets and can make its own decision. But I am not fine with closing stocks early just to get quicker access to cash or to gain a competitive advantage. If you want your competitive advantage, complain about slow moving stocks and not about the timing of payouts.

Casual players should be allowed to stop in here and then around payout dates and not get shocked with unexpected closings suited to the elite players.

-NapkinG-

Hey Guys,

Woah-- lots of good info and perspectives here. I think Napkin and Roy (and the rest) are right-- it shouldn't close early b/c things could change and there isn't a provision in the statement.

Props can't cover the whole span of myriad possibilities for what 'could' happen in the world that would affect the topic at hand, so instead I've been trying to make the payout criteria really specific and clear. With Atlantis, for instance, it'll HAVE to be space trash that delays the launch, or it'll close short (even if it's delayed by something else).

Fring did make iShare close. That wasn't an early payout-- it was in line with the payout statement. Stocks often pay out based on something happening before the "this has to happen by ____" date. That means if the development happens, it closes long, if it doesn't happen (and that date comes to pass), it closes short.

So, we'll keep Hadron going for now. Thanks so much for all of your input. And yeah, I think Hadron will be a certain short, but it would be inconsistent with the clause to close it out now.

xot

I completely agree with napkin. I am a casual player and closing early is a heavy disadvantage. It also adds a level of uncertainty.

um... super weird that my response (to all of yours) ended up second down the list of responses.

Guess I'm going to the developers with this, too...

Now everything's appearing in the proper order. It's not me-- I swear! But glad everything seems to be working again.

NapkinG not sure where your playing or what game your playing, but I haven't seen any level of cutthroatedness at all. Most of the elite players also hang out at ppxchat, and their a nice group who I have seen go out of their way to help each other and lower ranked players.

I further think that closing by date and not by meeting conditions by a date (meaning a stock can close early). only allows people to wave ride with impunity, and to stall any level of commitment to a stock until after the result is known, after which they can safely buy knowing that in the weeks or days to come it will close in the manner to which they predicted. It would sort of be like turning the market place into the special Olympics (no offense against individuals with mental or physical handicaps) where everyone gets to be a winner.

The nature of the market and one of the needed things to make it more accurate, is that there has to be risk, and getting caught on the wrong side of a closing is part of that risk. The only advantage that the "elite" active (daily hourly) players have over casual players is that there are times when a stock meets its criteria, and they are able to buy in or flip position after the outcome is known but before it is halted, and I have explained how to take of this problem but too many people who count on this flaw to ensure that they are in the right position didn't like the idea.

Personally, it doesn't make any difference whether it closed early or closed on the correct date. What's more important is that it closes short. This is one of those situations where it might have closed long because someone felt the LHC starting was the same as being "fully functional".

As long as this didn't turn into another BEEBACK, I'm a happy camper.

On the subject of closing stocks early, yes it would be a goofy practice in the general sense. It could easily lead to props being closed on incomplete information, or half-assed interpretation (like BEEBACK). The fact that it would add uncertainty is a silly objection, because this whole exchange is built on uncertainty.

But it certainly would put a damper on the activity roygbiv mentioned, traders switching their positions once the answer was already known or handed to them...

Thanks for the support kcondon,

While I often agree with roy, scoj, vulg, ej and most of the other regular posters, I disagree on this one.

Yes, Taylor, Fring does meet the requirements for ISHARE to pay at $100; I argue that this knowledge is 'saved' until the final judgement passes at the closing date. Frequent players have the advantage of jumping on the price early, less frequent players are punished by purchasing at a less profitable price.

Players will cry out saying that leaving a stock open after it is 'known' results in everyone gaining the same profit. I argue that this is the case only because the prices move so slowly, allowing less frequent players to only lose 2% of the payout.

When the outcome has become 'known' as the case is with ISHARE, the price will move up closer to true likelyhood (see LCDVSPLAS at $100).
The issue is not that it is open after it is 'known' but that the price cannot quickly reflect this known value.

I'm simply making the point that the solution to 'making profit after result is known' is not necessarily to close early. The true issue causing that effect is slow moving prices.

Whatever PPX wants to do, I can only play within it. But I want all views expressed before that decision is made.

-NapkinG-

For ISHARE, looking at the prop page, the difference between the 30 day high and the 30 day low is only around $2...fring has been available in the app store since Oct 1. Mentioned in gizmodo on Oct 3 (www.gizmodo.com/5058876/the-week-in-iphone-apps-fresh-fring-and-other-diversions). So people have had 20+ days to get on the right side of this and for various reasons (a. they didn't know about the stock..b. everyone who did own it, was holding it correctly) the price didn't go up but before you say "See, I'm right"...

Look at WIIFIT and GTAIV...the other day I read an article on engagdet that clearly stated (in the headline even) that the wii fit could overtake GTA IV as best selling game before the end of the year and sure enough both stocks start moving within a few hours...the combined change of both stocks has been $12...in only 2 days

So obviously the prices of stocks can move rather quickly but for ISHARE, people probably didn't even know it existed

Right but what price is GTAIV at right now? still at $78.25. Sure it dropped quickly, but I don't think many people still holding it still believe it has a 78% chance of paying at $100. That $12 drop is next to nothing when compared to the $78 profit anyone jumping on it this late will gain.

Here's my point, I only learned about the article until two days later so I lost out on that $12 profit, but I can still gain $78 from a likely short payout. The price of GTAIV should realistically be right around $50 right now, (i'd even value it lower than that) meaning that I would have missed out on almost 50% of the available gains from a $0 payout from my slow play. Instead, I just shrug my shoulders and take the rest of the large gains.

I know it sounds like I keep droning on about this stuff. But I want people to recognize that there is next to no risk is predicting a poorly valued stock. Don't complain about late traders gaining large profit from 'known' stocks and then praise a $12 move in two days on a complete switch in positioning.

I just want this view point expressed.

-NapkinG-

Just to be clear here, I haven't complained about late traders gaining large profit from 'known' stocks and I haven't praised a $12 move in two days on a complete switch in positioning. Never mentioned the first one and the second one I was simply stating a fact.

I do see where you are coming from but for me, there are just too many variables involved. For instance, does the price move based on how many people are currently holding it one way? How many transactions does it take to move? Let's say only 10% of the people currently holding the stock still play and therefore switch their position, how can you expect a 30 point drop when 90% of the people don't switch (numbers exaggerated)?

Hey Napkin,

I totally appreciate the point you make, and all perspectives here really are valid; it just depends on how you look at the game. The thing is, you see the date listed in the payout statement of ISHARE as a strict end-date. We look at that as an "if this thing doesn't happen by ____" date. So, your feeling is that the stock closed early, while ours is that it closed right on time (actually kinda late, given that Fring was available at the beginning of the month).

I hope this makes sense. Stocks present a certain what-if, and we must have an end date for the what-if-not. But it's great when a what-if pans out before the end date. It's up to players to keep their fingers on the pulse of what's happening in the world that might affect the stocks, and to get in and trade when they think they know which way it's going.

Thanks! Enjoy the weekend :-)

Here's another idea that might be worth kicking around...

In the event a stock becomes a "known" short or payoff, like HADRON or ATLANTIS, it might be a good idea to simply halt trading in the stock until the close date. That way traders are locked into their positions and no one can play the stock for an easy payout by buying or shorting just before the close.

And if there is some unforseen occurence that might change the outcome, then the prop can be re-opened for trading.

This would reward traders who got it right, lock in those who got it wrong, and enable trading if conditions change.

This technique is used in mergers and acquisions all the time; only owners of a stock as of a certain date get paid any premium over the list price, and those who buy afterward get bupkus.

I can not wait to hear what yall have to say about vulgarians post i do not know if i like the idea of not

I think the idea is excellent, Vulgarian. I only wonder if many will feel that it is unfair to halt a stock, that they should be left to trade whenever they wish. You're idea seems as though it would improve the predicting basis of this market.

Also, what is the feasibility of a halt-unhalt situation such as this?. From what I understand, it is the developers that take care of that business...and though Taylor has been on them like a hound dog, I don't know if the added responsibility would help things.

I don't like the idea of halting a stock significantly before closing. Ideally, the stock price should reflect the available information about the proposition so that if a stock becomes a sure thing, the price should move quickly to reflect that. This is what happens in the stock market. Halts are only put in place for short periods to allow information to be disseminated.

I'm more interested in seeing PPX become an accurate indicator of the probability of various science related proposals occurring than I am in making lots of PPX$. I don't think that halting stocks where the outcome is known will help. Putting links to relevant information on the proposal pages does help. Discouraging people from abandoning accounts might help.

When trading continues after the outcome is known, it is no longer predicting, it is reacting. This is the Popular Science Predictions Exchange, and by its very name "prediction" is the goal, not "reaction".

When something is a "known" factor in the stock market, like a dividend, merger, or buyout, only stockholders as of a given date receive the dividend or guaranteed price for the stock. Those who buy in later do not receive anything special, and that's why there isn't a flurry of buying after a dividend, merger, or buyout is announced. True, it is not a halt, but it is a mechanism to prevent traders from cashing in after a profit opportunity is known.

In this market, when a prop's outcome becomes known, there's a flurry of buying or shorting to cash in on the given. This activity serves no predictive purpose, it only demonstrates human nature (and we really don't need continued demonstrations, do we?).

The predictive quality of this exchange disappears when trading continues after a prop's outcome is determined. When I sent that note to Taylor, I'd originally just wanted to make sure the information got in front of the right people and hopefully avert another ill-determined payout, and I never considered an early payout.

But now I'm starting to think it might actually be a good idea to halt a stock under these circumstances.

but vulgarian i think that if like you said "When trading continues after the outcome is known" the stock should close not halt. if the outcome is known close it. if the outcome is not confirmed than no one knows the outcome and trading should continue. that is what i think, so there it is.

waiting to hear every one opinion.
MXF

The question, to me, should be what does PopSci want out of this? They have created a predictions market, but to what end? What would they like to see happen to a stock as it nears the end of its life? If they want to have a pretty graph at the end of the stock's term that shows everyone gravitating towards $100 or $0, or they simply want to collect as much data as possible from the players movements, then their aim should be to leave it open as long as possible. But if they are more interested in having players make choices to see how "right" or "wrong" the marketplace is, they should try to halt or close stocks as soon as possible. I guess it's also quite possible that the magazine just threw this whole thing together to see how much internet traffic they could generate, and didn't have a specific goal in mind.

It's pretty obvious there isn't much we can do about existing stocks. But I think PopSci needs to make a strategic choice on which way they want the game to go, and then word their props accordingly.