John Delaney

Intrade iPhone App Live & Free

2010-07-09T02:13:00.001-07:00

Our beta iPhone app is live in the iTunes Store and will be available free while our team of voluntary beta testers put it through its paces.

http://itunes.apple.com/ie/app/intrade/id380355142?mt=8

The app uses Intrade virtual currency and a new “look and feel” and some new functionality that will be applied to the www.intrade.com platform soon (while retaining the current version of www.intrade.com as an option for those who may prefer it).

If you are interested in being a beta tester of the app or the new version of Intrade, please let us know.

We would appreciate your feedback.

On behalf of the Intrade Team,

John Delaney

John.delaney *at* intrade.com

FOX and John Stossel Feature Intrade

2010-05-17T23:24:00.000-07:00

John Stossel spoke about prediction markets, crowd wisdom, and Intrade late last week.

The segment is available here in 2 parts.

Short links...

http://bit.ly/b9IFD8

http://bit.ly/bEaylp

Long links...

http://www.foxbusiness.com/on-air/stossel/#/v/4196606/can-betting-odds-predict-future/?playlist_id=87050

http://www.foxbusiness.com/on-air/stossel/#/v/4196605/the-widsom-of-crowds/?playlist_id=87050

Recent Intrade Press Coverage New York Times & Fortune

2010-04-30T09:17:00.000-07:00

Intrade has been fortunate enough to have been featured in the New York Times and Fortune recently.

New York Times: http://nyti.ms/ctT1NA

Fortune: http://bit.ly/csbxpm

Intrade Wants Beta Testers

2010-03-22T07:41:00.001-07:00

Soon we will have some new beta software, yes it has taken longer than hoped, but we are getting close.

If you are interested in being added to our beta tester panel let me know on john.delaney@intrade.com

Thanks in advance.

John Delaney

Happy St Paddy's

2010-03-16T09:52:00.000-07:00

Happy St Patrick’s day from all your friends on the Emerald Isle.

The 17th March is said to be that of St. Patrick's death and is a national holiday in Ireland. But as is typical of the Irish, it is a case of any excuse is good enough for a good party.

While for some St. Patrick's Day still has religious connotations, for most it is a day to “let your hair down” (if you still have the stuff) and go a little bit crazy or at least do something different.

But here is a bit to the worst trivia ever.

St Paddy himself was a big fan of blue and not green.

Perhaps the green theme for St Pat’s day stems from how many of us look after a couple or more Guinness, Bushmills, Baileys, Jameson, Irish Coffee, Smithwicks, Middleton, Tullamore Dew, Galway Hookers, and White Gypsy. That would be of course before a massive feed of bacon, corned beef and cabbage.

So no matter what you do on the great day that March 17th is, we really hope you have a good one. We will raise a glass to all our friends at least a couple of times before noon. As for the afternoon, our intentions will be good at least.

Guaranteed Segregated Members Cash Accounts

2010-02-01T09:45:00.000-08:00

Individual Member Segregated Bank Accounts

To provide additional transparency any member can request a personal account be established in their own name within the suite of segregated member funds accounts that Intrade maintains. As we incur a cost to provide this service to our members we passes on the cost only to members availing of this service.

This service enables you to receive on an individual Bank Statement in from a bank guaranteed by the Irish or Danish governments your balance.

More information available from help@intrade.com

Intrade Wants You to Find and Benefit from Arbitrage Opportunities

2010-01-19T01:39:00.000-08:00

It is the season to hunt for risk minimizing profit opportunities on Intrade and on and across other prediction market platforms. We would like to incentivize you to find, highlight and remove these market anomalies.

Periodically arbitrage opportunities exist on Intrade and other prediction market platforms. Arbitrage trading is a risk minimizing strategy that by definition should be “no-gamble”.

To encourage you to profit from these irregularities we will make sure our fees are no obstacle. We are offering all members the ability to execute arbitrage trades entirely on Intrade at zero fees for those trades.

Additionally any member who can find and execute an arbitrage trade between Intrade and any other platform should submit proof after the trades are completed. Once reviewed if our fees have caused the return on your trades to be negative we will refund upto 100% of our fees on such trades. We would encourage other platforms to consider offering the same.

Sometimes people identify arbitrage opportunities but are not in a position to execute the relevant trades. We have created a new thread here (see T&C's) where such arbitrage trades may be logged.

Anyone who does find and highlight to the public such an opportunity and does not execute the relevant trades themselves will earn our thanks, plus a $20 trading credit (and will probably increase the predictive accuracy of the market) if the trades are executed by a trader. Markets that are bid to over 100 or offered at less than 100 for mutually exclusive events do not necessarily qualify for a trading credit.

Fee incentives will be posted to your account after request to help@intrade.com and submission of relevant supporting information.

We hope and expect that people will develop simple price reading and price comparison robots to search for these opportunities. If you are a developer but not a trader and you have such an application or would like to create one, please contact me on john.delaney@intrade.com as we may be able to help you get started with API assistance and support.

Terms and conditions will apply to this offer, but no sneaky ones. Please see our Forum for T&C's.

Traders please take note: All profit and loss risks associated with all trades including trades and traders that attempt to benefit from this offer reside with the trader absolutely and not Intrade. In the event that a trader suffers losses in pursuing an arbitrage strategy for any reason (such as but not limited to a market rule change, one contract in a group being voided or unwound, the platform becoming unavailable, rule changes or differences on Intrade or across platforms, inability to complete the hoped for arbitrage or any other reason whatsoever) Intrade will not entertain, accept or otherwise enter correspondence about any losses as the risk will reside absolutely with the trader.

Free Intrade Historical Market Data - Beta Testers Required/

2010-01-13T02:55:00.000-08:00

Happy New Year to All.

We intend to soon offer on a trial basis certain historical market data free of charge as part of an initiative to improve the accessibility, transparency, and validation of prediction markets.

We hope in the near future that by making certain historical market data freely available (and foregoing a revenue stream) we will encourage further academic and business study and support of the prediction market phenomenon.

We will present data by category, event, market group, and individual market. No personal data will be made available. The initial reports that we will provide are closing prices and time and sales of each trade on a market. The data sets will be in a CSV format and will be refreshed daily.

We are looking for a limited number of people to Beta test our application and market data sets. Please contact us on data@intrade.com if you are interested in being a tester and getting access (T&C's will apply) to historical market data.

At What Point Do You Give Up?

2010-01-01T00:24:00.000-08:00

In business we all should prospect as if our life depends upon it, because often it does!

Having had many business relationships that seemed so promising and likely to be win-win we all know the feeling of dread when a good business prospect or worse partner won’t return calls.

I remember one time about 2 years ago when I was told by the CEO of a large NYSE listed financial services company that we had an agreement. I remember even better the personal disappointment and that of the team when it didn’t happen*.

It is at these moments we all ask ourselves “At what point do I simply give up?”

Winston Churchill in typical fashion answered this question better than most when he said "Never, never, never give up!"

That is my approach. Just because someone doesn’t “buy” or something doesn’t happen within the expected time does not mean that the opportunity is over. Sometimes you are not talking to the right person or underestimating the time required to achieve something of value.

I got my first job as a graduate after applying to the same investment bank 5 times within a month and not taking “no” for an answer. As an aside, I met my future wife on the first day I finally got a job there. Similarly, one of the best relationships Intrade has achieved is with a large media organization that happened after 2 years and over a dozen different approaches to different gatekeepers.

Thomas Edison when asked about the 700 hundred failures to create a long lasting light bulb is reported to have said “"I have not failed 700 times. I have not failed once. I have succeeded in proving that those 700 ways will not work. When I have eliminated the ways that will not work, I will find the way that will work."

Emulating an attitude like Edison or Churchill above will help you succeed. It most certainly has for us.

* Little did we know then that "no deal" was the ideal outcome for our future.

The Harder We Look, The Less We See.

2009-10-15T05:22:00.000-07:00

Research has shown that anxiety disrupts people's ability to notice the unexpected.

In one experiment, people were asked to watch a moving dot in the centre of a computer screen.

Without warning, large dots would occasionally be flashed at the edges of the screen.

Nearly all participants noticed these large dots.

The experiment was then repeated with a second group of people, who were offered a large financial reward for accurately watching the centre dot, creating more anxiety.

They became focused on the centre dot and more than a third of them missed the large dots when they appeared on the screen.

The harder they looked, the less they saw.

From http://www.telegraph.co.uk/technology/3304496/Be-lucky---its-an-easy-skill-to-learn.html

The FT Covers Intrade thanks to Carl, Intrade Exchange Operations Manager

2009-09-25T00:40:00.000-07:00

Politics: Several ways to lose a deposit

By Huw Richards

Published: September 25 2009 01:59 | Last updated: September 25 2009 01:59

Governments that fear they may be mere months from oblivion must take comfort where they can. So a listing on Intrade, the Ireland-based predictions exchange, has to be counted good news – or at least as good as it gets – for Gordon Brown and colleagues.

Eighth on the list of the markets currently most favoured by Intrade’s predominantly American clientele – and shoehorned between the Democratic and Republican prospects in the forthcoming election for Governor of Virginia – was the one on the likelihood of a Labour victory come the forthcoming UK General Election.

Admittedly, one element in this is that Labour’s hopes now appear to have receded to a point that they offer the thoughtful trader a potentially lucrative long-shot with only a limited downside. A win on a predictions market pays out at 100. Intrade rated Labour’s chance of being largest party following the next election at 15.

Still, it represented a marginal improvement on a site whose traders have earned a formidable reputation for collective wisdom – predicting all 50 states in the tightly-contested US presidential election of 2004, and in 2008 missing only on two, whose outcome was so close that they took some days to resolve.

As the UK election looms, spread betting and prediction sites can expect a sharp rise in political business. Interest inevitably follows the electoral cycle, spiking at election time after long periods of quiet. This is one reason why politics tends to be an add-on for companies whose main business is in more consistently appealing fields.

Politics has won Intrade a lot of publicity, but its core markets are financial. In Britain, politics tends to be the concern of companies that otherwise focus on sport.

Wayne Lincoln, trading spokesman for Sporting Index, says: “It builds into very good business at election time and brings in customers who don’t usually bet on sport, except perhaps on the Boat Race.”

By far the largest market at present – Mr Lincoln puts it at 95 per cent of SI’s politics business – is the number of seats gained by each party at the next election.

There has been little good news for Gordon Brown in the way this market has progressed. When he became prime minister in July 2007, Labour and the Conservatives were nearly level. The initial “Brown bounce” took Labour almost 100 ahead at 330-336 against 234-240 for the Conservatives.

But by the end of the year, Labour was back to 267-273 against the Conservative 300-306 – and its position has steadily eroded since: “Whatever goes wrong, it seems to stick to Labour at the moment,” says Mr Lincoln.

Recently, Labour has been rading at 205-210 on Extra bet, compared with a Conservative spread of 354-359 and the Liberal Democrats at 50-53.

The range of markets will grow as the election approaches. Sporting Index expects to add a considerable number on issues such as the number of women MPs and the time of the first declaration on election night.

It also has a market on the identity of the next chancellor of the exchequer. Mr Lincoln explains: “We put that up when it seemed likely Alastair Darling might go.” With that now seeming unlikely this side of the general election, the market leader is George Osborne, the shadow chancellor, with his deputy Philip Hammond running second.

One bet that might seem equally popular is the identity of the next Labour leader, but there is as yet only limited interest. Chris Shillington of Extrabet says: “We offered a fixed-odds market on that a few months ago. It got us a fair bit of publicity and a lot more traffic on our politics markets in general, but not a single bet was laid on it.”

Anyone who still fancies Boris Johnson’s chances of being the next Tory premier can back their hunch on Intrade, which puts its probability at about 6.9 per cent. Carl Wolfenden, Exchange Operations Manager, says: “That was a market we put up at the request of a member and there have been 53 contracts traded, which isn’t bad.” Several of Intrade markets originate in such suggestions. Mr Wolfenden says: “One example was presidential endorsements last year, which created a lot of interest.”

If hardly on the scale of a US presidential election, a British poll represents useful business for Intrade, which traded more than 17,000 contracts on the 2005 General Election. Much depends on how close it looks – predictions sites thrive on close-run things. The British poll at the moment seems rather too predictable, as does Germany’s election this month, with Intrade rating incumbent Angela Merkel as 95 per cent likely to continue in the job.

Still, US politics continues to offer much to intrigue Intrade’s clients. One particularly strong market at present is on President Obama’s health reforms, with agreement to a Federal-run health plan before the end of this year reckoned at 20.5 per cent.

Intrade Confidential Survey Results - Now Public

2009-09-11T01:46:00.000-07:00

Intrade is currently running a survey from its homepage.

The survey may be accessed here (Please take the survey if you haven’t already).

We are making the results* of our survey transparent and public. We are doing this as we believe providing open access to this information is in the best interests of our members, our business, the industry, our competitors, supporters and even our rare ;-) symbiotic detractors.

Should you like to discuss or collaborate on this or related surveys please contact me directly at john.delaney@intrade.com.

Regards,

John Delaney

CEO

Intrade

1. How did you discover Intrade.com?

Blog

12%

Friend or colleague

17%

Search engine (e.g. Google, Yahoo!)

23%

Facebook

0%

Twitter

0%

Other (please specify)

48% (Top thematic answers: College Professor, CNN, CNBC, HardBall with Chris Matthews, Larry Kudlow, Glen Beck, ABC 20/20, Politickr)

2. How would you feel if you could no longer use Intrade.com?

Very disappointed

67%

Somewhat disappointed

27%

Not disappointed

6%

N/A - I no longer use Intrade.com

0%

3. What would you likely use as an alternative if Intrade.com were no longer available?

I probably wouldn’t use an alternative

65%

I would use an alternative

35% (Top thematic answers: Drudge Report, Iowa Electronic Markets, survey/public opinion poll data, more time on virtual currency markets, any other real money prediction market)

4. What is the primary benefit that you have received from Intrade.com?

Various responses from respondents

85% (Top thematic answers: Profit, insight, excitement, hedge, training, education for finance, “seeing the curve before it curves”)

No responses from respondents

15%

5. Have you recommended Intrade.com to others? If Yes, why?

No

26%

Yes

74% (Top thematic answers: A futures market on events rather than commodities, , risk managed way to trade futures, a great place to use your knowledge to make money, the best predictions market with a good history, as an opportunity to profit from your good judgment, futures trading on current events.)

6. What type of person do you think would benefit most from Intrade.com?

Various responses from respondents

79% (Top thematic answers: finance, trader, investor, speculators, politicians, media people, people with expert information, Corp. CEO's, managers, 'Joe 6 pack')

No responses from respondents

21%

7. How can we improve Intrade.com to better meet your needs?

Various responses from respondents

83% (Top thematic answers: Improve liquidity somehow, Make depositing easier, a better user interface/upgrade your website, a central clearing counterparty, add sport markets, more local markets, make it easier to spread the Intrade word)

No responses from respondents

17%

8. Would it be okay if we followed up by email to request a clarification to one or more of your responses?

No

39%

Yes

61%

* From approx 100 initial respondents.

Market Volatility Report Just Launched

2009-07-27T02:42:00.000-07:00

We have just pushed a new report live this morning. You can access this report here or by clicking on the link from the homepage called “Market Data Reports – New”.

The first report here is called the “Contract Volatility” report and it shows the most volatile* markets during the last trading session.

We hope that this report allows you focus on markets that may offer good trading opportunities due to their volatile nature.

We will be adding more reports to this section soon. Please let me have your suggestions for any specific reports you would like to see.

Regards,

John Delaney

john.delaney@intrade.com

*Volatility is defined as the absolute percentage change in closing prices from yesterday to the day before, i.e. the opening price for this trading session to opening price from the pervious opening session.

Ireland Has A Good Recovery Plan Now - Will it Implement it?

2009-07-17T01:32:00.000-07:00

Well at least it has an idea on how to solidify its foundation.

Implementation of public spending report would reduce structural deficit by 3% of GDP

A Group set up to recommend how we reduce our public service numbers and costs released its report yesterday. It detailed €5.2bn in expenditure cuts. This equals 3% of 2009 GDP.

Top elements are...

Cut public employee numbers by 5% or 17,000 (€700ml payroll saving plus a fortune in non-payroll costs)

Cut social welfare payments by 5%

Lets hope the cuts happen soon. The Group think they can be in the majority in 2010.

If these cuts are implemented in full then our Government Deficit could get to 7% by end-2011.

Trade Alerts on Twitter

2009-07-15T02:06:00.001-07:00

We are now posting real-time trades to Twitter using Twitter username “IntradeTrades”

We intend to provide for customizable Trade Alerts by email in the near future.

Appreciate your comments below or to me on john.delaney@intrade.com

Don Not Criminalize Risk Taking.

2009-07-14T00:07:00.000-07:00

With so many businesses failing and risk being a pariah of biblical proportions what are some of the future implications and what can we do about it now?

Here is an example.

Say the business you started was to fail. You may feel that you would have been better off if you had stayed in an 8-till-5.30 job and took your 15 days holidays per year instead of giving every hour of every week to your own business.

There is a lot of risk aversion right now. People are saving. Taking too much risk is the stated cause of the mess we are in. But if we somehow criminalize the concept of risk taking where is the innovation and entrepreneurial spirit going to come from in the future?

Related Story from Washington Times "EDITORIAL: In defense of speculators"

http://www.washingtontimes.com/news/2009/jul/12/in-defense-of-speculators/

Related Market - wouldnt it be good to have this type of information on your company.

http://www.intrade.com/index.jsp?request_operation=trade&request_type=action&selConID=659100

Real Time Trade Alerts – Should be Publish?

2009-07-08T01:42:00.000-07:00

We already have much of the technology developed to publish via email, Twitter etc instant real-time notifications of matched trades on Intrade.

The notification would be short like the example below but would inform those interested of activity on Intrade.

Before we develop this I would appreciate you’re your input as to whether you would value this information / transparency.

The body of the text would be…

E.g.

Prediction market 2012.REP.NOM.PALIN just traded at 10.5% ($1.05 out of $10) on Intrade. Previous trade was 10.5%. http://tiny.cc/FS9lN

Economic Green-Shoots Wilting. Stronger Fertilizer Needed.

2009-07-06T00:18:00.000-07:00

Trillions have been asserted to be invested in getting us out of the recession, crisis or whatever you care to call it to-date. However to-date most of it hasn’t found its way out of bureaucratic processes. Even still, the CEO of GE, Jeffrey Inmelt, and others believe that "the crisis is over”.

Do you agree with him? Whether you do or don’t consider please…

June unemployment: Another half million added to the 14.5 million unemployed bringing the rate to 9.5%. This is expected to increase. There is a 70% chance that unemployment will be above 10.25% at year end. As a CEO of a company, we will be reluctant to resume hiring until growth commences.

Consumer Spending Reducing: Credit card companies are curbing consumer spending further as they are being stung by increased defaults and delinquencies. But consumers are adding to this be saving hard for the rainy day as evidenced by the recent saving statistics. With less people employed, spending will reduce further.

Individual States in Crisis: E.g. California defaulting on short term obligations. They can’t run current budget deficits. With taxes falling they are forced to cut spending (something the Irish government seem unbelievable slow to do) which will reduce consumer spending now and the foundation for growth in future as education spending is being cut.

Foreclosures Increasing: The rising number of foreclosed and abandoned homes and commercial property. There are about 2 million foreclosed or abandoned homes now.

So the crisis is over? Alas this seems wishful thinking to me at least.

Politickr Intrade Market Wrap Video

2009-07-01T21:49:00.000-07:00

Watch an independent periodic video market wrap here...

http://www.youtube.com/watch?v=jd7jCOtMULM&eurl=http%3A%2F%2Fwww.intrade.com%2F%23&feature=player_embedded

Thanks to Politickr.

On Innovation

2009-05-19T21:35:00.000-07:00

Yesterday I mentioned that we need to be innovative facing our challenges. But it dawned on me I did not talk about innovation enough.

Commuting in at 4.30am this morning I was considering it again. Here are some further thoughts...

Innovation is a fashionable word. I use it often, probably too often. But what is innovation and how should we think about it. Or "frame" it?

Think of it as the discovery of new paths, creating something new or a better version of something that already exists.

I looked for innovation in others and found Scott Belsky again. According to Scott Belsky of Behance “part of the process is defying the status quo”.

Here are a few quotes via Scott…

“The conventional view serves to protect us from the painful job of thinking.” -John Kenneth Galbraith

“If you can’t solve a problem, it’s because you’re playing by the rules.” -Paul Arden

“The truth is, creativity isn’t about wild talent as much as it’s about productivity. To find a few ideas that work, you need to try a lot that don’t. It’s a pure numbers game.” -Robert Sutton, a professor of management science and engineering at Stanford Engineering School.

Looking to old quotes may not be innovative but nothing wrong from building from the "shoulders of giants".

Have a good day.

Innovation and Competitiveness and Our Future

2009-05-19T02:49:00.001-07:00

We need to up-our-game. It is unlikely that the supportive winds of a global recovery will arrive for years and therefore we need to put in place now the foundation to have a big sail (think spinnaker) to catch the wind if and when it arrives.

Lets focus on education, innovation and competitiveness.

A recent report carried our by a Washington DC think tank ranks Ireland as 13th out of 40 for innovation and competitiveness. In some categories we did poorly, but overall we are in the top 15 of 40. In areas like corporate tax rates and foreign direct investment we are #1. The report focused on EU states and the US.

One of the many things concerning about the report is that Ireland only rank 18th in R&D and below places like China and the EU10 accession countries. This bodes badly for us in the future should our standing remain so low.

In the category of GDP per hour worked, Ireland exceeds the United State but in terms of I.T. investment and researchers per capita we are only at 75% approx. of the US levels. Again this is worrying.

While VC capital availability has become more troublesome from the last survey we are still 14^th and in the top 10 for entrepreneurship.

With the ongoing rise of China, India and global competition Ireland, the EU and the US will need to up-its-game.

I know investment capital at the moment is as rare as hens that have teeth. People are maxed out with borrowings including our government but where we can, indeed where we must we should focus now on…

1. Education – the cornerstone. Lets focus on the science, technology, energy, climate and food. I think clean traceable organic food may be the next “black gold”. And Ireland can be a super producer of this currently under appreciated commodity.

2. Technical Rights to Succeed. We need all the facilitating links to make sure we catch the wind and contribute to it.

a. The right regulatory framework – I give us an arbitrary score of 7

b. An accommodative tax policy – mixed score here. R&D investment relief OK, cost of employing and VAT is crazy, corp tax rates great. Score 6.5

c. Technological infrastructure. We are dreadful in this area. We need to do more and fast. I live 21 miles from Dublin and cant get broadband.

3. Focus on some “wicked problems” where we have strengths. E.g. we can contribute significantly to solving our and others fossil fuel dependency. Ireland has masses of untapped wind and waver energy. While we may not have the capital base to do the entire R&D required we must invest in these areas. We have had success before. Same can be said again for good food and water.

In conclusion, we and others are on our knees at the moment but we must continue to invest in our long term. Increase our productive capacity by focusing on education in the first instance and removing the hurdles to innovation and competitiveness.

In Ireland we are innovative and entrepreneurial by nature but we must keep our morale strong. Yes things are bad and will get worse, but “this too shall pass”, and when it does our attitude is what will fuel our recovery.

Follow me on Twitter http://twitter.com/JDelaneyIntrade

Tell us how to Improve Here.

2009-05-15T00:24:00.001-07:00

We're using crowd wisdom to improve.

Have your say here http://htxt.it/400E

Announcing the Intrade Virtual Internships.

2009-05-07T06:17:00.001-07:00

Announcing the Intrade Virtual Internships. http://htxt.it/rNMM

What will the ECB Do Today?

2009-05-07T00:01:00.001-07:00

Currencies Lets hope the ECB drop rates and confirm a program of quantitative easing today. http://htxt.it/XsUz

EU think 2010 unemployment in Eurozone will top 11%

2009-05-05T09:17:00.001-07:00

EU think 2010 unemployment in Eurozone will top 11%. We think it is higher. http://htxt.it/Q4xI

US Tax Changes - Will Hurt Ireland

2009-05-05T04:01:00.001-07:00

US multinationals paid $16bn US tax on $70bn earnings or a tax of 2.3% in '04. Obama intends to change this - Ireland to suffer. http://htxt.it/bbQw

Swine Flu - Update

2009-05-02T11:04:00.001-07:00

The markets are pricing in a 40% chance of 5000 or more cases of Swine Flu be end June.

Irish EU Commissioner McCreevy proposes new Directors Pay Guidelines

2009-04-29T05:10:00.000-07:00

These are new guidelines but the Commissioner will propose they be enshrined in law soon.

The guidelines apply to all financial undertakings having their registered office or head office in an EU state.

The main elements of the bankers' guidelines include:

-- payment of the major part of the bonus should be deferred to take into account risks linked to the underlying performance through the business cycle;

-- performance measurement criteria should privilege longer-term performance of a company;

-- financial institutions should be able to claim back already paid bonuses where data has been proven to be manifestly misstated;

-- a company's board should have responsibility for oversight of remuneration policy throughout the bank;

-- board members and other staff involved in the design and operation of remuneration policies should be independent;

-- remuneration policy should be adequately disclosed to stakeholders;

-- supervisors should ensure that financial institutions apply the principles on sound remuneration.

-- severance pay in cases of failure ot be banned

-- a minimum vesting period of at least three years on stock options and shares with some retained until employment ends.

-- Companies should also be allowed to reclaim the variable component of a director's pay

-- non-executive directors should not receive share options as part of their remuneration to avoid conflicts of interest.

Ireland to Shrink Most of Any Economy Since 1930’s

2009-04-29T02:56:00.000-07:00

Ireland’s economy may suffer the biggest decline of any industrialized country since the Great Depression of the 1930s, according to the Irish Economic & Social Research Institute.

Here are a few of the dreadful projections…

· GDP is set to decline 8.3 percent this year they believe.

· Ireland's economy is expected to shrink by 11.6 percent 2008-2009.

· Ireland’s economy will contract by 14 percent 2008-2010.

· Unemployment is set to increase to 13.2% this year-17% in 2010.

· Our budget deficit will hit 12% of GDP.

Remember that Ireland was once the fastest growing economy in the euro region. While Ireland is an open economy (3rd most open in the world behind Hong Kong and Singapore) and therefore exposed to the global situation the driver of the Irish problem is construction, the same sector that drove the boom.

Also a 10 percent contraction from its peak crosses the line that is often used to distinguish between a recession and a depression.

Due to our particular predicament our Government needed to increase taxes recently, and will increase them further in the October budget, and at the same time reduce spending. However they got the balance wrong. Increasing taxes reduces the chances that employers can achieve the pay-cuts that are needed to make Ireland competitive again. We desperately need to increase our competitiveness if we are to avail of an export-led recovery if and when the rest of the world bounces back.

But as Paul Krugman recently noted the “troubles of the Irish banks are largely responsible for putting the Irish government in the policy straitjacket they are in”.

In September the government offered to guarantee deposits at Irish banks which equates to a notional liability equal to twice our G.D.P. The combination of deficits and exposure to bank losses raised doubts about Ireland’s long-run solvency, reflected in a rising risk premium on Irish debt and warnings about possible downgrades from ratings agencies.

Earlier this month the government simultaneously announced a plan to set up a bad-bank to buy the bad assets from our banks while raising taxes and cutting spending, to reassure our lenders.

So what can we do?

1. Reduce our spending and increase our competitiveness. This requires severe government spending cuts alas.

2. Remember that like the boom, this bust will not last forever. It will be painful while it does. Our standard of living will reduce by 20% perhaps.

3. Don’t let the negative news get us down. Our morale and spirit is our most important resource now to get us out of the mess.

$50 to $46,562 in 2 years on Intrade.

2009-03-31T03:05:00.000-07:00

I was reminded this morning of a member (lets call her “Mrs. Midas” for this note) who made one deposit of $50 on 1st March 2007. As of 31st March, Mrs. Midas has an account balance of $46,562.30.

Mrs. Midas has made no other deposits, nor has she made any withdrawals. She has paid the exchange $4,463.66 in trading fees during this time.

During the two years since the initial deposit she has traded against 1,061 of other traders. The successful member traded on 516 separate markets covering economic, financial, political, entertainment, legal and current event categories on Intrade.

While this member was unprofitable on 38% of markets traded, a demonstrably disciplined cash and investment management approach contributed to the superb performance of her account.

The growth in her account balance and the dispersion of profitable markets to unprofitable markets traded are depicted below.

Deflation Most Likely, But What (and When) about Inflation?

2009-03-30T07:05:00.000-07:00

Most (as do we) believe that the risks of deflation are far greater than inflation currently. However, if the vastness of the quantitative easing and other “unconventional measures” being taken by central banks cause to much money to be printed then inflation expectations might and I mean might just ignite.

There are of course many other reasons why expectations of inflation may ignite, e.g. people start believing that the global role of the US dollar is undermined.

So while we predict that deflationary pressures will be with us for quite a while when will inflation raise its head and what types of markets would you like us to list on these topics?

Please let us know here.

Source: Google Trends

We and Others Know How To Get Credit Flowing Again - We Think!

2009-03-05T22:19:00.000-08:00

Now that governments around the world have declared they won’t let banks fail, at least certain banks that is, credit should start flowing between these banks naturally at national and international levels. But the credit is not flowing yet and this is due to lack of confidence between the banks.

This lack of confidence is due to lack of timely and accurate financial information (aka transparency) relating to the quality of the balance sheets of banks. Bank A will not do business with Bank B because of fear that B may be unable to honor its obligations due to toxic assets (aka bad loans or derivative positions) or go out of business even though Bank B’s government has bailed it out before.

But if governments (central bank’s, treasury’s, etc) are already acting as an insurer of banks through bailouts what is needed is to go one step further. This need not cost more per se. That step is moving bank to bank lending and borrowing onto a central market place where all transactions are guaranteed by a clearing house. In financial speak, move bilateral over-the-counter interbank trading onto an exchange with a central clearing house and clearing members.

Sure, there would be implementation issues like who would manage the exchange (While Intrade is happy to help ;-) perhaps the G20 could establish), who would be the clearing members and what banks would get trading rights. Also the thorny problems like would or should Ireland be able to join with our current precarious (albeit exaggerated) position? It should also be a pre-requisite for any bank to get approval of their guarantor Government before they can trade on the interbank platform to provide the very best financial information about its assets and liabilities.

Access to the market would create massive incentives for governments and banks to “come clean”. The incentives are access to credit and comfort when giving credit. If Japanese banks had such an incentive in the 90’s would they have recognized their debts earlier and would this have shortened their lost decade?

So, if what is needed is more transparency and trust then use an exchange with a clearing house. They work elsewhere. They have a big role to play here now we think.

What do you think?

European Banking & Deposit Guarantees

2009-02-18T00:14:00.000-08:00

There is justifiable discussion surrounding the Irish (and other EU members) banking industry and the government guarantees supporting customer deposits.

This is a very important issue for Intrade. It is one that we monitor closely on a daily basis. We do not take risks with customer funds. We have diversified the institutions where we hold segregated customer funds and the underlying government guarantees are not all from Ireland.

In the unlikely event of a single bank where we maintain funds defaulting and the government (Irish, Danish, UK or wherever) who has guaranteed those funds being unable to honor its guarantees (including an inability to access national reserve fund assets, support from the markets, from fellow members of the EU or the ECB itself etc) it is theoretically possible that all funds we have placed on deposit would not be easily accessible. In such a remote eventuality then the company from its own capital base (held at various institutions) would cover any theoretical shortfall.

While I appreciate the above is hypothetical, and I believe highly remote, on a far more practical level let me make a very respectful suggestion, one that I do not make facetiously or glibly. For anyone who is seriously worried about the full recoverability of their funds at any institution, Intrade included, they should periodically test the institution in question by seeking a withdrawal in whole or part.

Perhaps the above comment may be taken and reported on as a recommendation to withdrawal funds from Intrade or other institution, but my motivation is not to cause withdrawals but to encourage the people who have understandable concerns to remove those concerns by considering risk reduction actions.

As additional information becomes available I will post it here.

Personal note: I personally bank at the retail level the same banks where Intrade segregated customer funds are maintained at the corporate level. I do not believe the banks where Intrade segregated customer funds are maintained have any material default risk although I do believe further recapitalizations will be required. Furthermore I do not believe the Irish government will be unable to access additional funds to finance our growing deficit but I am aware that Irish credit default swaps.

The following article from Bloomberg this morning is insightful.

Germany and France may be forced to contemplate the bailout of entire nations rather than just individual banks as European government budgets buckle under the weight of recession.

German Finance Minister Peer Steinbrueck became the first senior policy maker to broach the topic this week, saying some of the 16 euro nations are “getting into difficulties” and may need help. French officials are also concerned about market tensions as the cost of insuring Irish, Greek and Spanish debt against default rises to records and bond spreads widen.

The nightmare for Angela Merkel and Nicolas Sarkozy is that widening deficits will prompt investors to shun the debt of some countries, sparking a region-wide crisis. While few investors are yet forecasting any defaults, the mere risk of it may prompt the bloc’s two richest economies to ignore the European Central Bank and announce their willingness to come to the rescue.

“When push comes to shove Germany, France, the larger players will bail out those smaller peripheral players,” said Alex Allen, chief investment officer of Eddington Capital Management. “You can’t let one part of the system fail because it leads to failure of the whole system.”

Allen’s betting that the risk at least one nation will leave the bloc is higher than the market currently expects.

Swelling Deficits

European deficits have ballooned as governments from Berlin to Dublin committed more than 1.2 trillion euros ($1.5 trillion) to save their banking systems from collapse. The situation will be underscored by the European Commission today, when it publishes a progress report on budget policies at 11.15 a.m. in Brussels.

The European Union’s executive arm forecasts a deficit of 11 percent in Ireland, 6.2 percent in Spain and 4.6 percent in Portugal this year. The euro region’s average budget gap was just 0.6 percent in 2007.

European officials have already expressed concern that their bond market could potentially face a crisis similar to that unleashed by the collapse of Lehman Brothers Holdings Inc. in September. ECB board member Lorenzo Bini Smaghi said Feb. 12 there’s a “risk that the mistrust that there is today in financial markets” is “transformed into mistrust in states.”

“I would be very reluctant to say: ‘O.K., let Ireland or Greece default, the market will sort it out, punish them for their irresponsibility of the past,’” said Thomas Mayer, co-head of global economics at Deutsche Bank AG in London. “They tried it with Lehman and realized that was not a good idea.”

Bond Spreads

The gap between the interest rates Greece, Austria and Spain must pay investors to borrow for 10 years and the rate charged Germany yesterday rose to the widest since before they adopted the euro. Credit-default swaps on Ireland rose to a record on Feb. 16, climbing to 378.4 points.

Greek credit-default swaps, 270 points on Feb. 16, show a 4.5 percent chance that the country will default in the next 12 months, according to ING Bank NV.

Eddington Capital’s Allen, who runs a fund of hedge funds, says the market currently “vastly underestimates” the risks and expects credit-default swaps for Greece, Italy, Spain and Portugal to double in the next 12 months.

Any state-funded rescues may meet with opposition from the ECB, which has repeatedly said the Maastricht Treaty forbids bailouts.

“The no bailout rule is an important pillar on which the European Union was founded,” says ECB Executive Board Juergen Stark, who helped draw up the fiscal rules underpinning the euro.

No Bailout?

At the same time, the treaty says that EU nations can grant financial assistance to a member state if a country is “threatened with severe difficulties” caused by “exceptional occurrences beyond its control.”

“The member countries are working hard on a ‘pre-emptive de facto bailout’ to prevent the test of the ‘‘no bailout’’ clause,” said Juergen Michels, an economist at Citigroup Inc. in London.

Part of the problem policy makers now face stems from the fact the currency union does not have a single treasury and relies on the Stability and Growth Pact, which has been breached in the past, to keep budgets in check. Billionaire investor George Soros said yesterday the region’s economy must confront the problem posed by the lack of a Europe-wide finance ministry.

For now, finance officials say that market concerns are not justified. ECB President Jean-Claude Trichet said in Rome on Feb. 14 he’s confident countries will work towards sustainable public finances.

State Rescue

Greek Finance Minister Ioannis Papathanasiou said three days earlier the extra interest rates on his country’s debt were unjustified. Spain’s Deputy Finance Minister Carlos Ocana categorically ruled out a default on Feb. 16, and the Irish Finance Ministry warned yesterday against drawing conclusions about public finances from the CDS market.

Steinbrueck’s comments nevertheless suggest that views in Berlin are shifting as the financial crisis worsens.

“In reality the other states would have to rescue those running into difficulties,” he said Feb. 16. Steinbrueck said that Ireland was in a “very difficult situation.”

“There will have to be some kind of support package for some of the smaller economies to avoid the tension and speculation about breakup,” said Ken Wattret, senior economist at BNP Paribas SA in London. “The bigger national governments will say this isn’t our problem. But when push comes to shove they might need to provide some kind of financial support.”

To contact the reporter on this story: Emma Ross-Thomas in Madrid aterossthomas@bloomberg.net

The Intrade World Crisis Index

2009-01-30T03:02:00.000-08:00

The Intrade World Crisis Index will tell us whether the Davos World Economic Forum Matters!

As business and political leagers gather at the five-day Davos meeting we will measure whether many of those who presided over blunders in business and policy can credibly lead us in 'Shaping the Post-Crisis World' - the theme for the meeting.

To measure the immediate impact of dozens of presentations and workshops by 2,500 business and 42 political leaders we have constructed the Intrade World Crisis Index.

Our admittedly unsophisticated sentiment index priced at 50.0 at the official opening of the meeting is comprised of eight equally weighted markets that measure the likelihood of recessions, depressions, increased unemployment, lower stock markets, and greater international tensions.

A higher post meeting index means our markets predict a more disastrous 2009 than before. A lower post-meeting index means our markets predict global leaders have reduced the probability that 2009 will be the disaster we previously thought.

You can see the updated Intrade World Crisis Index HERE.

Deposits Guaranteed

2009-01-21T07:36:00.000-08:00

Intrade Member Deposits Guaranteed by Governments Guarantee Scheme:

On or about the 30 September 2008 the Irish Government put in place a guarantee arrangement to safeguard all deposits at major Irish banks including Anglo Irish Bank.

The guarantee is for 2 years.

More information on the guarantee is available here:
http://www.centralbank.ie/nws_article.asp?ID=401
http://www.itsyourmoney.ie/index.jsp?1nID=93&2nID=100&nID=153&aID=620
http://www.finance.gov.ie/documents/publications/statutoryinstruments/2008/si4112008.pdf

In addition, National Irish Bank's parent, Danske, is covered by a Danish Government Guarantee Scheme.

Therefore all member deposits are now guaranteed by the Irish and Danish governments.

Member Funds Segregated: All member funds are held in specific and designated member segregated accounts with National Irish Bank (a subsidiary of Danske Bank), and Anglo Irish Bank. These accounts are separate and distinct from Company funds.

Individual Member Segregated Bank Accounts: To provide additional transparency any member can request a specific account be established in their own name within the suite of segregated member funds accounts. The Company incurs a cost to provide this service and passes on the cost only to members availing of this service.

This service enables you to receive on an individual Bank Statement in from a bank guaranteed by the Irish or Danish governments your balance.

More information on Irish Public Finances is available here:
http://www.slideshare.net/ollie100/irish-public-finance-presentation

But what about Ireland itself?
Well Ireland's 'AAA' credit rating was affirmed on Jan 20th 2009 and said the outlook for Ireland's ratings was 'stable' while Standard & Poor's said it was reviewing the triple-A rating on Ireland, and Moody's has also indicated it is considering the triple-A sovereign rating. Ireland's GDP grew by 6pc in 2007, but contracted by over 1pc in 2008, and a further circa 5pc decline this year is likely.

Any questions / comments feel free to post below or email me on john.delaney@intrade.com

New Contract Rule Commentators Sought

2008-12-16T03:40:00.001-08:00

We are going to implement (initially on a trial basis) the solicitation of comments from active traders and subject matter specialists on contract rules for new markets before we list them.

This will not apply to every new market but will more often apply to new categories or new events.

The objective of this innovation will be obvious to many but it’s consistency with the wisdom of crowds is appealing as we are looking to tap into a greater and more diverse knowledge base.

If you wish to receive by email notification of new markets with draft rules where you will have a short time to comment please let me know and I will add your name to the list.

email john.delaney@intrade.com

G.W. Bush: Biggest Regret?

2008-12-02T08:58:00.000-08:00

After reading this article I started to think about the good and bad things that G.W. Bush presided over.

While his stated biggest regret is the failure of intelligence in Iraq it got me wondering if people believe this should be his biggest regret if he should have any at all.

Whatever your view it would be great to hear them on this topic.

Futures on Intrade's Future

2008-11-19T08:19:00.000-08:00

These are uncertain times when we should place a premium on transparency.

Knowing the likelihood that your customer, supplier or counterparty will be in business in a year or two is valuable information. Being able to hedge against the closure of a business that you are exposed to have risk management and wealth preservation potential.

Intrade has always strived to list innovative markets that give maximum transparency in real-time on uncertain future events.

We have now just listed 4 new markets on whether Intrade.com will open and operational at the end of June 09, December ’09, June ’10 and December ’10.

The markets can be accessed here…

https://www.intrade.com/index.jsp?request_operation=trade&request_type=action&selConID=659099

We may list additional markets on other businesses in the future.

"This Too Shall Pass"

2008-11-03T07:18:00.000-08:00

And when it does, what follows can be the best if we use our best resource.

The phrase "This too shall pass" and the associated ring story were made popular by Abraham Lincoln. King Solomon searched for a cure for depression. He tapped the collective wisdom of his wise men for advice: Make yourself a ring and have thereon engraved the words "This too shall pass" they advised. The King carried out the advice and every time he felt depressed, he looked at the ring and his mood would change and he would feel cheerful.

A wise crowd behind a wise man.

Like me you may be jaded by the non-stop talk about financial crisis, recession, wealth destitution, damaged societal welfare and worst of all depression. But let’s put things in perspective.

Yes, our global financial systems have suffered what may be described as a near fatal heart attack, and while they are still very ill the best financial surgeons are pooling their talents to solve the problems. The surgeons, aka government leaders and central bankers, are working hard together to stabilize and reduce the likelihood of another financial heart attack.

The origins of the financial crisis (a credit but more latterly a liquidity crisis) is that we all have bought vast amounts of property that produced toxic by-products that clogged the arteries of the financial system. It is true that we could not have bought these properties had money not been lent to us. It is also true that some of our lenders, although not all, were aware that the lending they facilitated was risky.

Before the financial crisis our economies were not in great shape. Yes they were growing a little, but many economies had become "fat and happy" and very inefficient after almost 10 years of prosperity. Ireland was the poster boy of the" fat and happy" club.

Now, partly as a result of the crisis, our economies are not growing or worse are actually contracting. This means that people are losing jobs, losing homes, losing “nest-eggs” and a sense of security for the future. Millions of people are stressed and worried about their future and their contentment and peace of mind are damaged. We may still be fat, but not nearly as happy.

The financial and economic shocks to our systems, and indeed our psyches can perform a very useful service. Yes they will be painful, but pain whether it is financial or physical alerts us to our problems.

While we all (you, me, bankers, regulators, the media etc) are responsible for the current correction what’s important now is focusing on the specifics of the problems, to ensure we do not undermine the positive impact that a recession can have while avoiding the evils of a depression.

We all caused our current problems, and we must all be involved in the solution, not just the government or regulators.

Those we have placed in leadership positions in our countries are stepping forward but neither they nor we should be short-termist. They should not keep economically defunct industries, practices and procedures alive with borrowings, but they should increase investment in our competitiveness and productive capacities. It that means an increase in borrowing which it will then so be it.

Our countries have huge amounts of natural and neural basic resources, but to increase our wealth we must increase our intellectual and physical capital, i.e. we really need to make changes to our education system, our attitude to work, our attitude and use of resources, and national and international infrastructure. Education seems #1 to me.

A laser focus on such matters is no magic pill. These are medium and longer term deliverables (i.e. more than can be achieved in 4 years). They will not provide the immediate feel good factor as we suffer withdrawal from the almost instant gratification that the explosion in consumer credit facilitated.

Our #1 untapped resource is the vast collective intellect that we have only started to use. Harnessing the "wisdom of the crowd" has a very big potential role in improving all of our lives. If we do it, we all have a voice and will feel part of the solution as well as the problem. We can solve some wicked problems, like climate, resource, growth, social, and economic challenges. In simple terms, there exists between us the best information on how we solve our key challenges. If our leader’s embrace and permission new systems like prediction markets to operate in a transparent prudent way I am convinced that we can contribute in no small part to the solution.

Recall, that US Department of Defence believed a prediction market could provide valuable information on growth, risks and social issues. Hundreds of academics, dozens of Fortune 500 companies, and millions of people believe that prediction markets can help provide valuable information on economic, financial, social and environmental issues.

Improved ways of working, regulating, and consuming are all within our grasp if we tap into our greatest resource. Our intellect! And the great thing about I.Q. reserves as distinct from our oil reserves is that they increase the more we use them.

We have harnessed the energy of a small atomic globe in the last century, and we can harness the collective intellect of our much larger one in this century. The only question is when? The leader's that we have or are about to elect need to be as brave and innovative we are.

And whether you are a president, a plumber, or a regular person just like me no matter what today or tomorrow holds never forget the wisdom that a wise group gave a wise king.

Crisis = Opportunity

2008-10-28T04:36:00.000-07:00

Prediction markets have a big role to play

Historic volatility, unprecedented coordinated bailouts, nationalizations, and bankruptcies of some of the doyennes of the financial elite are just some of the new realities we are all faced with.

Many may well be impressed with the speed and scope of the response to this crisis. I am, but it seems to me that Intrade and all in the prediction market industry have an increased obligation and opportunity to contribute to solutions in avoiding future crises.

Since Enron, WorldCom, Tyco et al and again since this crisis ignited we are being told that maximum transparency, disclosure, and better risk management tools are the answer. These solutions are exactly what prediction markets look to and can deliver.

But is something really transparent if it is buried within a 200 page document or if you need a degree in accounting to decipher it? Likewise, if the costs of producing or gaining access to the information is such that only a few benefit, is that maximum transparency and disclosure?

The Sarbanes-Oxley Act (SOX) introduced after the Enron / WorldCom debacles is considered a success by most. However, in light of recent events and comments from Henry Paulson, John Thain and even former AIG chief Hank Greenberg, who all believe SOX threatens the US competitive position in the global marketplace, it hardly seems a panacea.

This is where prediction markets can really help now and in the future. We offer real-time aggregated collective intelligence that is easy to access and interpret. E.g. recession, tax rates, unemployment, offshore drilling, OPEC actions, bank failures, etc. Prediction markets provide a single number -- the probability or risk of something happening. Right now there seems to be a 75% probability that the US will be in recession in 2009.

To get the best predictive information barriers to entry for participants and providers must fall so that adoption and diversity can grow. To contribute their maximum to society (which we expect will befit Intrade and other leaders in our industry) prediction markets need to be embraced, encouraged, and considered part of a solution to managing risks and change. Only when this happens will there be such diversity and adoption that the markets can reach their full potential in aggregating information on the most important issues.

In addition to new and revised regulations, the time is right for expanded coverage of those regulations to include prediction markets and the innovative solutions they offer. If ever there was a time to embrace innovative solutions for assessing and managing risk it seems that time came before I started to write this short note.

Prediction markets are far from perfect, but they typically deliver incentivized real-time, efficient, aggregated probability estimates on uncertain future risks and events. They have never had a more important role and potential than right now.

I welcome your comments.

John Delaney, CEO, Intrade.

john.delaney@intrade.com

We Want Talent!

2008-10-21T02:12:00.000-07:00

I am likely to be severely reprimanded for using this forum to post a blatant advertisement. Apologies in advance.

While others are downsizing, and we face a reduction in trading volumes after the election we are still looking to add to our small team. This contrarian behaviour which you may rightly view as at-odds with crowd wisdom is probably another reason for being reprimanded.

If you are interested in being part of a small team who are passionate about the role and potential of prediction markets, a new niche that Intrade has in part created you will find details here.

Some additional information…

We have a small number of big initiatives that need additional resources
There are less than 20 full time people employed at Intrade everyone has the opportunity to have a big impact
Our comment to the CFTC on the treatment of prediction markets is here, and all industry comments are here
We have an exciting plan for a future that needs better information and transparency

If you really believe you have a lot to offer, I would love to hear from you.

Best regards,

John

John Delaney
CEO
Intrade.com

mailto:john.delaney@intrade.com

Update October 28: We are thrilled to have received over 100 high quality applicants in the last week or so. It will take us a little time to work through them all and revert to people. Thanks for your patience in the interim.

Price Variances on Intrade Political Markets

2008-10-16T06:40:00.000-07:00

Intrade Comment on Alleged Manipulation in the Presidential Markets

There has recently been vigorous discussion of unusual trading activity on our political prediction markets. What could be motivating the activity has been subject to widespread speculation by academics, journalists, our own users and others. Some external commentators have claimed the unusual trading patterns indicate that our markets are being intentionally manipulated for political purposes. Others have gone further yet.

Part of the public utility of Intrade markets hinges on the quality, scope and usability of the predictive information they provide. Another part hinges on providing a marketplace where investors may assess and manage risk by trading on innovative markets.

The trading activity on our platform that is the subject of great speculation centers around two particular markets: 2008.PRES.McCAIN, and 2008.PRES.OBAMA. To a far lesser extent 2008.PRES.CLINTON(H). A number of such occasions are depicted in the charts below.

The trading that occurred during these times may be summarised as follows...

1. Multiple large volume Buy orders placed and matched rapidly caused the McCain market to move significantly above the previously prevailing market price by up to 10 pts.
2. Multiple large volume Sell orders placed and matched rapidly caused the Obama market to move significantly below the previously prevailing market price by up to 9 pts.
3. The market prices of the contracts then seemed to represent discrepancies between overlapping Intrade markets, and also between Intrade markets and similar markets on other platforms for some time thereafter.

We have carried out an extensive investigation into this matter including but not limited to...

1. A full and careful examination of the publicly available information on the trading - our exchange notably provides public free access to all time-and-sales and closing price data on all open markets.
2. A full and careful examination of all non-public information (orders, positions, accounts, IP addresses, physical addresses, customer documentation including copies thereof).
3. Communication both verbal and in writing with those involved.
4. Full and complete consideration of specific applications our Exchange Rules in light of the trading activity in question.

As a result of our investigations we would like to advise the following.

The trading that caused the unusual price movements and discrepancies was principally due to a single "institutional" member on Intrade. We have been in contact with the firm on a number of occasions. I have spoken to those involved personally.

We are satisfied that they are using our markets in good faith and in the ordinary course of their business and that there has been no contravention of our Exchange Rules. Our investigations lead us to believe that the member is using increased depth in these markets to manage certain risks.

Further, it is apparent that the cost of time in accumulating the desired positions by those "institutional" members responsible for moving the McCain market up and the Obama market down differs fundamentally to loyal "retail" members that Intrade relies on.

The Exchange views this unusual activity as an indication of the increased relevance and traction of Intrade markets as risk management tools coupled with the yet maturing state of the prediction market industry as a whole.

As our markets gain further fluency and are more broadly used to help manage risk (i.e. as they mature furtuer) we expect to see other cases where single, well-financed parties accumulate large positions in short periods of time in our markets and possibly distort prices away from prices on other platforms. As funds flow between platforms gets easier, arbitrage opportunities will last for far shorter periods that is currently the case.

In any and all future similar cases, we will diligently monitor the activity, the accounts and profiles of those responsible and take whatever action is in the best interests of all exchange stakeholders.

In an era when lack of transparency is rightfully being considered persona non gratis it is perhaps relevant to note again that we are determined to provide maximum transparency of all exchange activities free of charge including real-time market data, time and sales and volume as per the links at the bottom of this post. Additionally, we will start publishing more details about trading volumes and open interest on our exchange just as soon as possible.

We are thankful for your interest in this matter and in Intrade.

With very best regards

John Delaney
CEO
Intrade.com

Update: See comment in the New Yourk Times http://www.nytimes.com/2008/10/20/business/20predict.html?ref=business

http://data.intrade.com/graphing/jsp/downloadClosingPrice.jsp?contractId=376101

http://data.intrade.com/graphing/jsp/downloadTaS.jsp?contractId=376101&timezone=US/Eastern

http://data.intrade.com/graphing/jsp/downloadClosingPrice.jsp?contractId=409933

http://data.intrade.com/graphing/jsp/downloadTaS.jsp?contractId=409933&timezone=US/Eastern

1. How did you discover Intrade.com?
Blog	12%
Friend or colleague	17%
Search engine (e.g. Google, Yahoo!)	23%
Facebook	0%
Twitter	0%
Other (please specify)	48% (Top thematic answers: College Professor, CNN, CNBC, HardBall with Chris Matthews, Larry Kudlow, Glen Beck, ABC 20/20, Politickr)

2. How would you feel if you could no longer use Intrade.com?
Very disappointed	67%
Somewhat disappointed	27%
Not disappointed	6%
N/A - I no longer use Intrade.com	0%

3. What would you likely use as an alternative if Intrade.com were no longer available?
I probably wouldn’t use an alternative	65%
I would use an alternative	35% (Top thematic answers: Drudge Report, Iowa Electronic Markets, survey/public opinion poll data, more time on virtual currency markets, any other real money prediction market)

4. What is the primary benefit that you have received from Intrade.com?
Various responses from respondents	85% (Top thematic answers: Profit, insight, excitement, hedge, training, education for finance, “seeing the curve before it curves”)
No responses from respondents	15%

5. Have you recommended Intrade.com to others? If Yes, why?
No	26%
Yes	74% (Top thematic answers: A futures market on events rather than commodities, , risk managed way to trade futures, a great place to use your knowledge to make money, the best predictions market with a good history, as an opportunity to profit from your good judgment, futures trading on current events.)

6. What type of person do you think would benefit most from Intrade.com?
Various responses from respondents	79% (Top thematic answers: finance, trader, investor, speculators, politicians, media people, people with expert information, Corp. CEO's, managers, 'Joe 6 pack')
No responses from respondents	21%

7. How can we improve Intrade.com to better meet your needs?
Various responses from respondents	83% (Top thematic answers: Improve liquidity somehow, Make depositing easier, a better user interface/upgrade your website, a central clearing counterparty, add sport markets, more local markets, make it easier to spread the Intrade word)
No responses from respondents	17%

8. Would it be okay if we followed up by email to request a clarification to one or more of your responses?
No	39%
Yes	61%