Tuesday, August 01, 2006

TS decides to expire North Korea missile contracts at Zero

Even though missiles left North Korean airspace, TS has decided to expire the contract at 0. Most customers and prediction market experts thought that it would be better to unwind the contracts or to expire them at 100. (Personally, I think TS should have expired them at 50.0, but that might have gotten more people more upset).

It's a big black eye on the stated goals of this blog.

More to follow.

UPDATE: Masse's recent post today concludes:
The public record suggests that TradeSports should grade the bet as a winner. If TradeSports go by the intent of the contract, then the bet is a winner. If TradeSports go by the letter of the contract, then its staff should get confirmation that the missiles didn't leave North Korea's airspace, which the US DOD will never say, of course. Thus, in both cases, the bet is a winner. However, if paying the "yes" speculators at this late time is problematic, then another solution is to unwind all trades and void all bets. In any case, TradeSports should work on better criteria for wording bets. In conclusion, this is a difficult situation, but expiring this North Korean Missile prediction market at 0 is not the right way to go.

CORRECTION: My source of the above quote was from Masse. He originated it from Sports Book Review.

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