TradeSports
From Wikipedia, the free encyclopedia
Tradesports is an online trading exchange whose members speculate on the outcomes of future events in sports. Founded by John Delaney in 2000,[1] by 2005 it reported 50,000 members and an average monthly volume of four million trades.[2]
Tradesports markets trades in the binary 0-100 format. If the event specified in a given contract occurs, the contract settles at 100 points, or $10 per contract or share; otherwise, the contract settles at 0. Thus, the current price of the contract can be imputed as the probability that the specified event will occur.
For this reason Tradesports offers its market data to prediction market researchers. At one time it assisted the U.S. Department of Defense in a controversial scheme (ultimately cancelled) to assess probabilities of future terrorist attacks.[3]
As one would expect in such markets, Tradesports' contract wording has repeatedly been an issue. In July, 2006, Tradesports conceded [4] that a contract regarding whether North Korea would launch test missiles that would land outside its airspace was problematic. Traders have been arguing that the event took place and had been confirmed by the DoD as the contract required.
Tradesports facilitates trades between members but does not participate in trading itself. The exchange makes contractual agreements with market makers, who promise to offer two-sided markets in certain contracts in exchange for paying lower fees.
The most liquid contracts on Tradesports are nationally televised football games (NFL and NCAA) and daily financial contracts (such as, Will the Dow close higher today?). The Tradesports platform is especially suited for trading live sporting events while the event is taking place ("in-play"). On most days there are several games that are available "in-play" and have guaranteed liquidity between plays from independent market makers.
Unlike Betfair and Betdaq, older trading exchanges, Tradesports accepts customers from all addresses if the customer certifies that they can join the exchange.
Tradesports recently launched a new pari-mutual pool platform for US horse racing at www.tradehorseracing.com.
In 2005 Tradesports applied to the Commodity Futures Trading Commission for permission to open a regulated futures exchange in the United States.[5]
Tradesports' sister website, (founded in 2001[6] and acquired by Tradesports in 2003[2]), is an alternative portal for all non-sports-related predictions markets. Dublin-based Trade Exchange Network Limited also operated TradeBetX.com, which focuses on European interests. As of January 1, 2007, Trade Exchange Network divested its interests in Tradesports and TradeBetX.com to a newly formed company, TradeSports Ltd. These two Web sites now offer only sports-related trading markets, while Intrade.com handles all non-sports markets (politics, finance, pop culture, etc.).
[edit] References
- ^ Liam Halligan and Philip Carter, "A Market in Mayhem," Sunday Telegraph, April 18, 2004.
- ^ a b Grainne McLoughlin, "Betting on Success," Sunday Business Post, January 25, 2004.
- ^ "Storm of Protest Forces Pentagon to Pull Plug on 'Terror Futures'," Evening Standard, July 30, 2003.
- ^ "Expiry of North Korea Missile Test Contract" http://www.tradesports.com/aav2/news/news_58.html.
- ^ U.S. Demand Spurs Dublin Firm's Exchange Bid," Irish Independent, May 9, 2005.
- ^ Daniel Gross, "Polls say Kerry. Futures say Bush," New York Times, August 8, 2004.
- Tim McLaughlin, "Tired of betting on Wall Street? Web site turns events, even Cardinals playoff chances, into futures trading," St. Louis Post-Dispatch, Oct. 15, 2005.
- Ben White, "Sox Are Up? Sell!; Web Sites Mimic Commodities Exchanges," Washington Post, Oct. 23, 2004.
- Matthew Ericson, "Page Two: July 6-12; Gambling on a Candidate's Future(s)," New York Times, July 13, 2003.
- Tom Kohn, "You can bet, literally, on when Saddam will be gone," Pittsburgh Post-Gazette, Feb. 11, 2003.
- Donald Luskin, "Who's Behind the Bush-Futures Attacks?", National Review, Oct. 18, 2004.
- Peter John, "Intrade offers online way for punters to play," Financial Times, July 31, 2001.
