User Guide for Traders

Introduction

The Sauder School of Busines Prediction Markets are organized to facilitate the trading of contracts whose payoffs are determined by forthcoming political events such as a federal or provincial election.

Registered participants invest funds and trade contracts on a computerized market. All invested funds and cash deposits will be repaid to registered participants after the close of the market, however individual traders may make or lose money depending on how well they predict the election outcomes. Participants invest their own funds, buy and sell listed contracts, and bear the risk of losing money as well as earning profits. The market can be reached exclusively on the World Wide Web at predictionmarkets.ca.

The Sauder School of Business Prediction Markets are operated as a not-for-profit venture. As described in this manual, the method of issuing contracts and making final payoffs on these contracts ensures that the Prediction Markets do not realize financial profits or suffer losses. No commissions or transactions fees will be charged.

The exclusive purposes for conducting the Sauder School of Business Prediction Markets is teaching and research. Through the prediction markets, participants learn first-hand about the operation of a financial market and, because they have an added incentive to do so, they often become better informed about not only the current election but also the election process itself. As a research project, the prediction markets generate valuable data that will provide insights into market and trader behaviour. Participation in the prediction markets is open to all Canadian residents 19 years or older.