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John Delaney
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Joined: October 13, 2008 07:35:20 UTC
Messages: 358
Location: Dublin
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These are uncertain times when we should place a premium on transparency.

Knowing the likelihood that your customer, supplier or counterparty will be in business in a year or two is valuable information.

Being able to hedge against the closure of a business that you rely on have risk management and wealth preservation potential.

Intrade has always strived to list innovative markets that give maximum transparency in real-time on uncertain future events.

We have now just listed 4 new markets on whether Intrade.com will open and operational at the end of June 09, December ’09, June ’10 and December ’10.

The markets can be accessed here…

https://www.intrade.com/index.jsp?request_operation=trade&request_type=action&selConID=659099

We may list additional similar markets on other businesses in the future.
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John Delaney
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ark
Senior

Joined: October 20, 2007 05:11:52 UTC
Messages: 154
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Hi John,

What about insider trading?
fod
Senior

Joined: July 02, 2008 09:53:12 UTC
Messages: 160
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ark wrote: Hi John,

What about insider trading?

That would be a good thing. It would keep the market accurate.
firecasey
Newbie

Joined: October 21, 2008 06:07:25 UTC
Messages: 5
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Looks like I'll be processing a full withdrawl ASAP. What an incredible bad move....I would think that listing a market such as this would only drive potential new customers away.
Strangelove
Director
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Joined: July 05, 2008 02:33:05 UTC
Messages: 903
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Thank you for the transparency, John.

What guarantee may you have that our deposits will not be taken should Intrade fail?

I'm also concerned with a potential conflict of interest. If trader's deposits are not guaranteed, it would be in a company's best interest to keep the value of its contract for remaining in business high until the very point when the company closes down. I'm not specifically saying Intrade would do this, but it's certainly cause for concern. I can see how a depositor might be more inclined to make a withdrawal now if funds aren't guaranteed.

Thanks for your time.
GAW838
Sage

Joined: September 10, 2007 01:39:47 UTC
Messages: 1210
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How exactly would expiry work if intrade is no longer up and operational?
ark
Senior

Joined: October 20, 2007 05:11:52 UTC
Messages: 154
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All Intrade needs to do is pump up a few hundreds/thousands (if needed) to keep the prices up in the high 90s for all contracts.

It is very superficial confidence.
John Delaney
Senior

Joined: October 13, 2008 07:35:20 UTC
Messages: 358
Location: Dublin
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Folks,

A few comments…

1. I knew these would be controversial but still decided they were appropriate for our platform, our members and indeed all our stakeholders. Some will think these markets foolish, bold, suspicious or whatever. But they simply feel right and appropriate to me. Transparency like the truth will out.

2. Member funds (i.e. your deposits) are separate and segregated from the funds of the Company. To make sure we provide the highest levels of safety and security possible, all member funds are maintained in segregated bank accounts, totally separate from Intrade's own capital. These segregated accounts are maintained with some of Irelands largest banks where all deposits are guaranteed by the Irish state. To provide additional transparency individual members can have a specific account established within the suite of segregated accounts. This service further separates your funds from those of other members and enables you to see on an individual Bank Statement your balance, and transactions. For more details please email help@intrade.com. This information has been routinely featured on and form our homepage, in exchange news items, in press releases and on this forum.

3. These markets will trade at prices that some people may be concerned about, i.e. they will not trade at 99 as some people will be natural sellers to hedge perceived risks. But this transparency is right and appropriate. If we list similar markets on other companies then we must list same on Intrade. Intrade should “eat it’s own porridge”.

4. I have stated publicly before http://freakonomics.blogs.nytimes.com/tag/john-delaney/ if we want prediction markets to predict with the lowest possible error and if insiders have information, then getting that information reflected in the market increases the quality of the information. Not the conventional view perhaps, but so long as insiders identify their orders then it seems that such information and trading is in everyone’s good.

Best regards,

John

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John Delaney
CEO
Intrade.com
[WWW]
Strangelove
Director
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Joined: July 05, 2008 02:33:05 UTC
Messages: 903
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Excellent response. Thank you.
CALIFORNIA
Senior

Joined: October 26, 2007 20:20:54 UTC
Messages: 417
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Bold move, John . . . time will tell.
JohnRemington
Senior

Joined: February 03, 2008 19:16:54 UTC
Messages: 363
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John,
I have contacted help@intrade.com to inquire about a segregated account, and have not received a reply. Perhaps you could post publicly the terms and fees associated with this type of account.
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JohnRemington
Senior

Joined: February 03, 2008 19:16:54 UTC
Messages: 363
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And... now the forum software is not handling hard returns or email addresses properly.
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greatunknown1
Junior

Joined: December 30, 2007 17:29:52 UTC
Messages: 75
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I have to admit I was sceptical at first but your response is heartening. To increase the efficiency of this market could you give us a brief outline of your costs, revenue, and projections?
GAW838
Sage

Joined: September 10, 2007 01:39:47 UTC
Messages: 1210
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I get that intrade's corporate funds are segregated from deposits. My concern is that the actual mechanisms for expiry would not be functional is the conditions for the contract expiring at 0 were actually it met.

I just want some explanation as to how intrade would expect shorts ever to be paid and I don't think the reminder about segregated accounts is sufficient. If traders think they are going to have to file a law suit in a foreign court to recover winnings if the contract expires at 0, that is going to distort prices by discouraging shorts from getting involved. If you go short, you are betting not only that intrade will go down by the specified date, but that you will still be able to recover your winnings through the expiry process.
Domer
Sage
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Joined: October 25, 2007 07:13:37 UTC
Messages: 1749
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ark wrote: Hi John,

What about insider trading?


Exactly. There's no regulatory agency monitoring the market or the trades. As much as I like Intrade and what they have created here, John is not being accurate about "transparency." Without third party monitoring/enforcement, transparency cannot be guaranteed. That's a matter of fact, not opinion.
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