What outcomes are implied by the CA19PL.OTR contract?

Because payoffs in all of our markets must sum up to $1, there needs to be one contract that covers "all else". In some markets, as the popular vote share market, this is the share of the parties without a named contract, plus votes to independent candidates. In the majority government market, the "other" contract is covering the possibility of a "hung parliament" without clear majority. But in the plurality market, the CA19PL.OTR contract covers only two remote possibilities: (a) that a fourth party (neither CPC, NDP, or LIB) wins a plurality of seats, or (b) that the two front runners gain the same number of seats in parliament—a tie. Neither of these events are impossible but highly unlikely. There is no "tie-breaker" in the event that the two front-runners end up with the same number of seats.

If traders believe that there is a long-shot bias in the price of the CA19PL.OTR contract, these traders can take a short position against that contract. If you are curious about how to take a short position against a contract that you believe is overvalued, please read the section "Long and Short Positions" in the User Guide for Traders. Taking a short position in a prediction market is easy!

Posted Monday, September 9, 2019 at 15:45
#federal