The payout clause is worded backwards, but it says what it says. If you want your ppx net worth to climb as the stock price does, you need to own it long.

Visit www.ppxchat.com A great place to meet PPXers and learn strategy.

Okay, well having paid attention, and buying short while not getting confused initially, and having my points validated, and having established the fact that this stock is flawed to the benefit of people who short it, and furthermore having information that none of this matters, I am going to cover the stock.

I've made my case, and appeal to the administrators to credit my account with 48,500 Popsci dollars as recompense for the lost opportunity of the prospective gain my funds would have otherwise generated had this error not occurred. Thank you msholdenct.

Here's whats jacked up about this one... there's no time limit. It only pays out (at POP$0) if its removed from the US or Canada sites. If its not removed, then it never ends! So, essentially the only way this can pay out (if it pays out) is when it pays out at POP$0. It'll only reach POP$100 if we push it there. So, lets all buy it and send it up to $100.25 or higher then, short it and wait potentially forever. That way, we all make money on its way up, then all make money on its way down. Oh, wait, that would mean collaboration, and that would result in mass penalties to our portfolios. Well, never mind... still, that'd be cool

Put that aside here are the "rules" for creating new props.

1. New props shall have two clearly defined possible outcomes, where payouts at POP$100 and POP$0 are both possible. (SCRABULOUS currently doesn't meet this criteria as it does not have a possibility to pay out at POP$100.)

2. New props shall not have a payout condition that could already be considered true. (PASSCRX was an example of this as it was true by its literal interpretation on the day it was created.)

3. New props shall be written with clearly understood payout terms such that a reasonable person (see: http://en.wikipedia.org/wiki/Reasonable_person) can understand the payout condition. (HOTAIR is an example of this as the common trader assumed it would payout at POP$0 even after reading the articles that eventually lead to it paying out at POP$100.)

4. When more than two outcomes are reasonably possible, the payout condition must be declared so that each reasonable payout possibility is assigned to a given direction (either POP$100 or POP$0.)
(An example of this would be :
If Condition A is true then payout = POP$100, or else if either Condition B or Condition C then payout = POP$0)

"New props shall have two clearly defined possible outcomes, where payouts at POP$100 and POP$0 are both possible. (SCRABULOUS currently doesn't meet this criteria as it does not have a possibility to pay out at POP$100.)"

Actually this is possible; if the makers of Scrabble (Hasbro I think?) drop the case, or grant the makers of Scrabulous usage of their trademark, then it would obviously not be removed, thus the stock would pay out at $100.

A better way to make the stock would be: This proposition will pay out at POP$100 if Facebook announces that Scrabulous will not be removed from Facebook.

The stock is flawed in more than one way. First, its possible that it will never pay out. But secondly, and this is the point I have been trying to make, if it ever DOES pay out, it will be wrong. I shorted the stock, and when the price went up, funds were subtracted from my account.

"Well, if you short a stock, and the price goes up, you should lose, right?"

WRONG!

The payout line is worded backwards. This stock pays POP$0 if the stock goes to 100. Now here is where some people get fuzzy. What does the price going to 100 mean? Does it mean that Facebook removes Scrabulous? Or does it mean Facebook does something OTHER than permenantly remove it?

Well, if you look in the "Help" section here, you will see that this market uses the convention that a price going to 100 means the proposition is true. Its written in the rules.

So, if the price goes up, like it did when I owned it, that means the market is indicating that the stock is moving towards a "true" outcome, which in this case, pays POP$0.

People who bought long would stand LOSE money as the proposition nears trueness.

Very attentive and very sharp people, such as myself and a few others, easily noticed all the implications of a backwards proposition, and naturally bought short.

People who SHORTED the stock, should benefit as the outcome price of the stock tends towards 100.

Remember:

True proposition = 100
The payout for this stock being true = 0

So when the price goes to 100, the payout is 0

I bought short, so when the price went up, I should have benefited.

I'm not confused about this, as I have shorted many stocks before.

So, not only is the stock flawed because it's possible it will never pay out, but it is also flawed at a more fundamental level. The payout algorithm is WRONG WRONG WRONG. But numbers don't lie. And an equation only does what it is told to do. Its the same algorithm that is used to correctly calculate all the other payouts.

So, that tells us that the only other likely explanation is that the equation has flawed or wrong information. And this is obvious to anyone looking at the payout line. POP$0 for a true proposition, when all the others pay POP$100, and when the all the others assume 100 = True?

Someone, somewhere, wasn't paying attention when they released this proposition, and they DID NOT NOTICE the TYPO in the payout line. We were made to SUFFER, SUFFER, SUFFER for this egregious act.

I continue my appeal and petition that the administrators credit my account in the amount of: POP$48,500

This would be fair compensation for the lost opportunity of potential profits that my POP$51,500 would have been subjected to if I had not had this money tied up in a stock that DOES NOT HAVE TO BE FLAWED. A simple reversal of the TYPO will fix this stock, but should be done only after compensating those who were attentive enough to SHORT THIS STOCK.

I should ask for more, because of the lost opportunity of profit that my original profit of POP$48,500 would have generated, and the subsequent lost opportunity that the profit on the profit of THAT profit would have generated, and so on. All and all, I estimate I have lost somewhere in the neighborhood of POP$97,000 on this proposition, and it would be kind of the administrators to credit me with this amount.

But I, being ever-judicious and fair, and only asking the amount of POP$48,500 in direct damages.

Thank you

Although you are right, you miss understand what shorting a stock does. When you short a stock you are not betting that the stock will pay out at zero.The definition of shorting a stock is betting the negative option comes true. The misconception is because usually the stock pays out at zero when the negative comes true. Since the stock pays out when the negative come true (the opposite of most stocks) then when you short the stock you are betting that the stock does pay out, and when you buy the stock you are betting it will not pay out.

This is not the first time I have seen people get confused by this, and many have lost money due to it. I think in the future it would be better if stocks are always worded so that they pay out when the proposition comes true, thus avoiding the confusion.

@jeffreyawyatt: it's too bad you misread the prop...things happen

Simply because 95% of the time, something coming true pays out at $100, doesn't mean it's some rule somewhere. It's really just something that happens almost all the time. Popsci is free to choose the wording of all their props. Make sure you participate in the prop review process so it doesn't happen again.

Also, how about you just cover the short? That way you get your money back. Initially I owned this one but after realizing it was poorly worded, I got rid of it. So just get rid of it and own a different stock.

I covered it as soon as it moved and it became obvious that the payout was flawed...I only lost POP$250 on the thing, I think. Also, in the help section, it says a positive outcome is indicated by a price of 100. And in this stock, a price of 100 PAYS OUT AT POP$0.

I'm simply arguing from PopSci's point of view. I covered the stock and could care less. I'm simply pointing out that the algorithm is right, but probably an hourly worker in data entry made a wrong assumption about what the input data means and got it backwards in their head. The prop, to be correct, according to the wordage of the payout line, should payout POP$0 when the price reachs 100, and a POP$100 payout when the price reaches 0.

We all KNOW the stock is flawed. I'm simply using the wordage of the payout line, and the wordage in the help section to clarify the KNOWN-to-be flawed results that will naturally result from a known-to-be-flawed proposition. Bad info in, bad info out. THAT is THE golden rule of computing, and I'm simply clarifying the characteristics of the flawed results from the prop. No argument here, I covered the stock.

I know sounds paradoxical that a stock should payout POP$0 when the price reaches 100, BUT that is what happens when ERRORS occur - things happen, result are wrong and YES, even paradoxical.

The fact is, is that a 'normal' stock pays out POP$100 when the price reaches 100. In this prop, THE PAYOUT IS REVERSED FROM NORMAL, so, paradoxically, 100 MUST = POP$0 in order for this known error to be explained, understood, clarified, and demonstrated, as I has been done here.

"This proposition will pay out at POP$0 if Scrabulous is permanently removed from Facebook in the U.S. and Canada."

We all agree it's a flawed prop. But don't overthink it. The way I read this (and the write-up that goes with it), Scrabulous is currently not part of Facebook, correct? If Scrabulous comes back to Facebook, it will pay at $100. If not, it will pay at $0. It will pay at $100 because if it returns, it was not permanently removed. The question is, how permanent is "permanent"? Until Facebook ceases operation? As written, this can only pay at $0 if Facebook closes down, having never reinstated Scrabulous. It's only real shot of paying off (as is) would be at $100, on that fateful day when Facebook and Hasbro kiss and make up.

I tried looking for a comment Taylor may have made on this subject to remedy the situation, but I haven't found anything. Hopefully, a ruling can be made on this turkey soon so we can get on to better things.

This no longer concerns me, as I have covered this stock with very little loss. I will make this final entry and leave it for you guys to ponder until it is clear.

Again, from the Help section:

"What does "short" and "cover" mean?
You know the maxim "Buy low, sell high"? Well, if you think the price of a proposition will go down, not up, you can "short" that prop and make money as it falls. Here's how it works: When you short a prop, you borrow shares and sell them to another buyer. Eventually you must repay, or "cover," the shares you've borrowed, by buying more shares at the new (and hopefully lower) price and returning those shares to the lender. Your net profit is the difference in price between the shares when you "short" them and when you "cover" them. So not only can you buy low and sell high, you can short high and cover low.

If you short 100 shares of a propostion that's trading at POP$40, you pay POP$4,000 from your cash at the time of the short. If the proposition goes to 0 (meaning it doesnt come true), your position automatically cashes out and you'll get POP$4,000 (your original investment) plus POP$4,000 (your profit which comes from 40 - 0 x 100shares) for a total of POP$8,000 added to your cash balance. "

Now, consider the following:

A.) "This proposition will pay out at POP$0 if Scrabulous is permanently removed from Facebook in the U.S. and Canada."

This means that the stock will pay POP$0 for a POSITIVE result relative to the proposition. If the stock is permanently removed, the stock will pay POP$0 when it is removed.

The Prop says that the stock will pay POP$0 when the proposition is true.

And since a true proposition is indicated by a price of 100,
that means, without question, that the stock will pay POP$0 when the price = 100.

Correct me if I'm wrong. But a price moving upwards means that people think the proposition is going to be proven true. If this is not the case, then this is contrary to the following passage found in the help section:

"Each stock has a value in our virtual currency (Pop Dollars) of between POP$0 and POP$100, which serves as an indicator of the market's opinion on the question posed-lower prices mean the market thinks the answer to the question is "no," higher prices indicate "yes."

In the case of Scrabulous, the price started moving up, people thought it was going to be proven true in other words. With a normal stock, paying POP$100 for true propositions, people who shorted would suffer. But as there is NO DOUBT that Scrabulous pays the opposite (POP0$) for a true outcome, then people who shorted this will naturally benefit instead of suffer.

This is all based on the assumption that the price going up means that the outcome is moving more towards trueness. This assumption is reinforced by the quote from the help section.

Revisiting the above quote from "Help," we have:

C.) "If the proposition goes to 0 (meaning it doesnt come true), your position automatically cashes out and you'll get POP$4,000 (your original investment) plus POP$4,000 (your profit which comes from 40 - 0 x 100shares) for a total of POP$8,000 added to your cash balance. "

Folks, if the prop paid POP$100 this would be just like any of the other stocks I have shorted. The payout is reversed, and last time I checked the dictionary, "Reverse" meant "Reverse". There is no question this stock is flawed in the way I have demonstrated. The Help section validates all I have said, logic validates all I have said, Common sense validates all I have said. The prop is flawed. This is not in question.

For those who have answered, and for those who will answer without considering the facts, I have no help for you. This stock is different, the pay out is reversed, and the payout does not reflect reality according to the logic, facts, conventions, rules, and sense of ANY KNOWN system on the planet, the Universe, or any of the infinite alternate dimensions that you, I, God, or anyone else are capable of comprehending or perceiving and furthermore including the balance of the cosmic realities that the aforementioned parties are NOT capable of comprehending of perceiving.

Its like when you are betting a bucket will fill with rainwater to win a prize. If the bucket fills when you bet long, you win the prize!! In this case, NOTHING!!! Because this stock pays POP$0 for a true outcome. Therefore, people who bet short, do not win the prize. In other word, people who short, do not win "NOTHING!" They should therefore receive the opposite of the prize won by the people who went long on this stock, which is - you guessed it - POP$100.

People who shorted this stock should benefit as the price goes down. The stock is flawed because funds were subtracted from my account when it went up. Look at it this way - and remember, this is not a normal stock:

Because I shorted this stock, as many of you have annoyingly pointed out, I should move further from the prize for being correct. Normally, this means you lose money. But in this case, the prize for being correct is POP$0, and yes, you are correct when you say I am moving away from that, towards the POP$100 side of the spectrum. But funds were subtracted from my account. I lost POP$250 on this and immediately covered when I saw the stock was flawed. Boo hoo. I don't care that I lost a whoppin' 250.

FACT: The payout for this stock is flawed. PROVEN.

It is that simple. I leave it for you to get confused about again most probably. And guess what? None of this really matters because the stock is flawed in another way and will never pay out. I'll waste no more time here.

*** Correction ***

Above, I stated:

"People who shorted this stock should benefit as the price goes down. The stock is flawed because funds were subtracted from my account when it went up. Look at it this way - and remember, this is not a normal stock:"

The first sentence of this paragraph should read:

"People who shorted this stock should benefit as the price goes up."

I'm sorry jeffrey, but you are reading some of this wrong. The payout will NOT occur at $0 for a positive conclusion. The payout will occur at $0 for a negative conclusion. The negative conclusion is that Scrabulous is "permanently" removed from Facebook. The assumption is that the opposite will also happen. A positive conclusion, paying at $100, will occur if Scrabulous returns to Facebook.

If you read most of the other props, they ONLY list the terms of the positive payout. And in those cases, we assume that if the positive terms are not met, the stock pays at $0. In this case, popsci went the opposite direction. They listed the negative terms of the payout. So we must now assume that if the negative terms are not met, the stock pays at $100.

Please do not think I am defending this prop. This was botched pretty badly, and it needs to be put to sleep(in a humane manner, of course).

Maybe it would be easier if you redefined what the words "positive" and "negative" mean to this case. This prop will pay off at $100 if those tons of Facebookers finally get their oh-so-precious Scrabulous back. That's positive (to them), right? And if they never get it back, that's negative. Maybe the prop writer was a big fan of Scrabulous and felt it was a sad day when he/she lost his/her Facebook game. That person would definitely see the "permanent" loss of Scrabulous as a negative outcome.

And I implore you to return and comment, jeffrey. You really haven't had too much to say about this subject.....

Reply to:

"I'm sorry jeffrey, but you are reading some of this wrong. The payout will NOT occur at $0 for a positive conclusion. The payout will occur at $0 for a negative conclusion."

WRONG!!!!

I give you the TEXT of the actual payout line quoted verbatim for all to observe:

"This proposition will pay out at POP$0 if Scrabulous is permanently removed from Facebook in the U.S. and Canada."

Interpretation: If Scrabulous is (i.e positive outcome) permanently removed from Facebook in the U.S. and Canada, then the payout will be POP$0.

You state:

"The payout will NOT occur at $0 for a positive conclusion," and this is factually WRONG according to the payout line as CLEARLY SHOWN ABOVE.

The Payout line clearly and unambiguously states that the payout of POP$0 WILL occur for a positive conclusion.

You state:

"The negative conclusion is that Scrabulous is "permanently" removed from Facebook.

WRONG!

The POSITIVE conclusion is that Scrabulous is "permanently" removed from Facebook.

You state:

"The assumption is that the opposite will also happen. A positive conclusion, paying at $100, will occur if Scrabulous returns to Facebook."

The assumption is left to the trader to assume.
No-where, no-way, no-how can a POSITIVE outcome pay at $100, as CLEARLY demonstrated, shown, and proven above.

Again: FROM THE HELP SECTION:

"Each stock has a value in our virtual currency (Pop Dollars) of between POP$0 and POP$100, which serves as an indicator of the market's opinion on the question posed-lower prices mean the market thinks the answer to the question is "no," higher prices indicate "yes."

Contrary to what you assert, Popular Science themselves state "higher prices indicate "yes.""

Again "higher prices indicate "yes.""

And once more just in case you missed it:

"higher prices indicate "yes.""

chefboiaarni, thank you for your input here. I sincerely do not mean to sound abusive, but I've been running around in circles for months pointing out the obvious. Granted, its confusing. But its no more complicated than seeing the reflection of your reflection in opposing mirrors in a barber shop. Shorting reverses the payout for the same assumption as a long position. If you take THAT PAYOUT and reverse it again, as this stock does, it will punish instead of reward you if the price goes down, the opposite of a normal short. Last time I checked the dictionary 'Reverse" means 'Reverse" I will not go so far as to give you a link to dictionary.com.

Imagine you are driving down the road and you stop and put your car in reverse. When you step on the accelerator, you goes backward - a short position. Just because you step on the accelerator, does not mean that you will ALWAYS go forward. Shorting a normal stock is loosely akin to this phenomenon. Furthering this analogy, if you stop again, and let your mechanic come in and tinker with your reverse gear, like what the Scrabulous folks have done here, then your car will go forward if he has reversed the effects of the reverse gear, as has been done with the payout line in this stock.

Again, the payout for this stock should increase for people who shorted as the PRICE GOES UP! This is proven. There is no argument. If you cannot see this, I have no help for you. I'm sorry if this sounds abusive, but I've laid out the facts as clearly as they can be laid out. I quote directly from the help section, and I quote from the proposition itself, so that there is no chance for misinterpretation.

I have no help for those who cannot see something that is a little complicated.

Will a moderator weigh in here? I'll accept whatever they say without further argument, since I covered this stock long ago anyway.

I understand what you are saying. IF you are right, it is a truly mind-bending mess. But have you stopped to consider what I am saying? My interpretation makes it much simpler. The prop NEVER stated a positive outcome. All other props have stated a positive outcome, except this one. If you read it MY way, they only stated the negative outcome, leaving us to assume the positive outcome. And it's not a huge crime to do that (but probably a misdemeanor) , because they make us assume the negative outcome all the time. But the fact that they did it backwards from their standard prop questioning format makes it confusing at best.

I have emailed Taylor directly to weigh in on this prop to give us an official word. If she emails me back, I will copy it here.

And I do not take offense, jeffrey. I believe you are reading it wrong, and you believe the same of me. It's well worth the discussion, in my opinion. As long as it is officially explained, I'm happy.

This looks like a typo that perhaps wasn't caught when the prop went up, so we have to work with it as it's written. So, Chef's take is correct. We just work backwards. If it isn't permanently removed, it pays out at $100.

Permanently is a word that should not be in there. Who was driving this bus before I hijacked it, huh?

xot

On the bright side-- weird props keep your brain flexible and gives PPX an element of (dare I say) risk and danger.

Thanks a ton, Taylor!

I guess we will have to hope that either:

A) Hasbro and Facebook will reconcile and bring Scrabulous back, or
B) Facebook goes under soon.

Because it's all about us, right?

It IS all about us.

What we really need is a date for the prop to end. Damn.

msholden suggested via email that we choose a date a year out, and then I can notify users through the PPX news (which is also our RSS feed) blog, and we can add it into the prop. I generally try not to tamper with props that are live, but this one is feasibly interminable otherwise.

Thoughts? Uproar? Adoration?

xot

ps. Go talk about BOWN in the BOWN forum! Do you love the site? What's your favorite innovation? What'd we miss? Is Pleo cute or WHAT?

Actually, If you look further back in the thread, you'll see in my first post that I attribute the confusion here to just that: A TYPO. And if it is a typo, then that is just fine. The attentive people who knew to short this stock should benefit. The possibility that this is just a typo was, and still is, my suspicion.

But for lack of clarification, we must all continue to believe that this stock will pay according to the logic I have proven in this thread.

I'm fine with it being a typo, btw. Certainly Popular Science cannot be expected function without error. If its a typo, it doesn't matter who is right. But until clarification comes EVERYBODY is right, and we will go round and round, just as the last few posts made the point I had the foresight to make in my first post of this thread.

I am on record as being for changing props. Halt it, give a couple weeks notice of the change to come in multiple places (maybe introduce a color change to grab player's attention), and release it back into the wild.

But it's not like PPX doesn't have props that will close by 2050 already. And I'm sure the roygbiv's of the game can give you an articulate reason to leave it as is.

I vote for the catch and release program. It seems humane enough to me.

jeffrey, Taylor Hengen is running the show, and has issued the clarification. Look at her comment at 5:37pm.

Yes, several of her posts did not show up before I last wrote.. I thought I refreshed my screen before posting.

Taylor, if it IS removed, then it pays out at POP$0 for people who went long, and POP$100 for people who went short, right? Thats what I would like to be clarified.

I am not speaking for Taylor, and she should feel free to correct me. But the way I read this discussion:

PPX will probably halt Scrabulous to give an end date of roughly a year from now (and inform players of the change). It will be restarted, with a payout at $100 (long) for the return of Scrabulous to Facebook, and a payout of $0 (short) for the loss of Scrabulous on Facebook.

The $100 payout statement may or may not be included. I have no idea. But the only substantive change made will be an end date.

No $0 for long and $100 for short.

I need a drink

Jeff, please re-read my post. The payout clause does not effect who gets money how. Regardless of how a stock is written, a short is a bet that the price will drop. A long is a bet that the price will rise. In my opinion though, this stock as just a mistake made trying to get more propositions onto the exchange.

I'll wait for clarification from Taylor before further comment. I take it that her previous statement:

"This looks like a typo that perhaps wasn't caught when the prop went up, so we have to work with it as it's written. So, Chef's take is correct. We just work backwards. If it isn't permanently removed, it pays out at $100."

Means that I'm right. If it isn't permanently removed, it pays out 100 to people who went long. Meaning that if it IS permanently removed, then it pays out 100 to people who went short. This is consistent with the logic of the flaw that I've been pointing out.

Okay, for lack of further clarification, I think we can all assume I am correct. People who shorted this stock will receive POP$100 in the case that scrabulous is permenantly removed as per convention, as per the proposition itself, as per the clarification provided, and as per the further lack of clarification saying otherwise. Thank you all.