PredictIt

PredictIt is a real-money binary-options prediction market that tests your knowledge of political events by letting you buy and trade shares in the outcome of everything from a U.S. or international presidential election to a Supreme Court decision, either Yes or No.

Taking part in PredictIt is fun and easy. Pick an event you know something about and see what other traders believe is the likelihood it will happen. Do you think they have it right? Or do you think you have the knowledge to beat the wisdom of the crowd?

The key to success at PredictIt is timing. Make your predictions when most people disagree with you and the price is low. When it turns out that your view may be right, the value of your predictions will rise. You’ll need to choose the best time to sell! PredictIt allows up to 5,000 people per market of up to $850 each on a particular market. Each outcome has a probability between 1% and 99%, with the sum of the two always adding to 100%. We convert those percentages into cents so that every share has a price between 1 and 99 cents. The price of these shares will change over time.

Keep in mind that, although the stakes are limited, PredictIt involves real money so the consequences of being wrong can be painful. Of course, winning can also be extra sweet.

PredictIt is an educational purpose project of Victoria University, Wellington of New Zealand, a not-for-profit university, with support provided by Aristotle International, Inc., a U.S. provider of processing and verification services. The main objective for its event contracts market is to determine whether it can aggregate information and predict outcomes of certain events more accurately than through alternative means, such as public opinion polling. PredictIt and Victoria University use the results from the market for statistical analysis, market theory, and trader psychology, and as supporting data for research papers and analyses.

The site launched legally late 2014 in the U.S. after being granted a No-Action Letter by the Commodity Futures Trading Commission (CFTC). Prediction markets, like this one, are attracting a lot of academic and practical interest. Prediction markets are very good at what they do. Research shows they beat pollsters and pundits regularly. In 2008, for example, a previously existing prediction market came within a single electoral vote of predicting the election. In 2012, the market predicted 49 out of 50 states. So, you get to challenge yourself and also help the experts better understand the wisdom of the crowd.