When you sell (buy no) two or more mutually exclusive positions (e.g., Hillary Clinton winning the 2016 presidential election and Jeb Bush winning the 2016 presidential election), the margin requirements should be based on your worst-case loss, not the loss if both outcomes (i.e., BOTH Clinton AND Bush winning the election) happened, which is impossible.
This would free up capital in the accounts of traders who are selling in overbid markets and would encourage more traders to do so. Currently, many market have a bid totals well in excess of $1. I suspect this is at least in part because the current margin structure reduces the incentive to sell across the board, because the return on investment is too low. Worst-case loss based margin requirements would greatly increase the return and the overall efficiency of these markets.
And results! Apparently Delphi showing up was all it took!
An email went out yesterday explaining that the rollout of LCP on a new market was postponed for a week.
I completely agree, and this would get me involved in many more markets!
This feature is being introduced on the PredictIt trading platform. Check your email box for the announcement regarding Linked Contract Pricing to find out more details.
What is the timeline for applying margin-linkage to existing markets?
Thanks for asking about the Linked Contract Pricing rollout. As previously announced, Linked Contract Pricing will be activated on new markets on Friday October 9th. All existing multi-option markets will not convert until later dates.
Only ONE market will be opened with LCP on October 9th. It will be a multi-option market based on the Obama approval ratings with a one-week expiration cycle. It does not have a set time of day for launch. The market will open "some time" on Friday as it has in previous weeks.
Scheduling details for the conversion of existing markets will be publicly distributed through a mass email sent to all PredictIt users very soon. Stay tuned!
This email didn't come through to my account (I have since updated my email settings). Is the information posted online anywhere? Perhaps you could re-post it here.
Agree. Please add this feature.