If I own Yes shares am I allowed to purchase No shares to play a spread?
Just to be clear, I'm not a Predictit rep. I stumbled across this site when Bob Beckel mentioned it on afternoon television one day.
This site is very interesting. But there are interesting limitations, including the number of shares of each prediction that are issued initially. The concept of arbitrage seems to me to be contrary to what the site was intended to do -- measure the public perception of whether a political event would occur. If someone is more interested in "making money" from the shares here than registering an opinion, it's not that hard to corner the market.
I think the only way to prevent that is to limit the number of shares one may hold in a particular question, and a determined "investor" could likely circumvent that.
A lot of people owning a few shares will give better predictive results than a few holding large stakes attempting to double their money. At least that's my perspective.
No, I would advocate a change to the site to allow it.
Gary255-- how would a user implement that without a change to the interface? Running two separate accounts is way too much trouble. You have another suggestion?
Candidly, I would agree that this is currently a small and therefore inefficient market. I find it fascinating and and interesting casual pastime. But why should that prevent the users from doing what I proposed? As long as the users understand the situation I don't see the harm.
Does a PredictIt representative respond to the forums? Or maybe Candidly is a PredictIt rep?
The market here is too small to be rational yet. It doesn't make sense to have a question where both YES and NO are trading at 0.85, nor does it make sense for there to be even a 5 cent gap between buy and sell offers.
I don't know the number of "investors" here, but it's not enough yet to make it work like a real market.
I wondered the same thing gary255. Can't tell if our inability to do that with the current software is a bug or a feature. Maybe the folks designing the prediction market want a data-set of forecasts that aren't as complicated.
Allowing us to take both side would have three benefits in terms of improving predictions:
(1) increases the availability of traders, essentially doubling our number, which should make it quicker for trades to clear.
(2) allowing us to forecast with more precision that just up/down. i.e. "the probability is above 25 but below 42"
(3) enabling the PredictIt market to to assemble a data set with dynamic predictions over time. As it stands now, once you forecast at a good price, no more info is collected about your assessment of the ongoing odds.
I would like to own both Yes and No shares in the same question - obviously at different prices in order to arbitrage the spread difference.