20 June 2012

iPredict Ltd: Who will be the next Prime Minister of Pakistan?

New Zealand’s online predictions market, iPredict, has launched eight stocks asking who will be the next Prime Minister of Pakistan.

The stocks can be traded by any of iPredict’s 7000 registered traders plus anyone else who signs up for free at https://www.ipredict.co.nz/app.php?do=register.

Pakistan’s Supreme Court dismissed Prime Minister Yousaf Raza Gilani on Tuesday, and the country’s National Assembly is expected to choose a successor before the end of this week.

iPredict is offering stocks on the probability that Chaudhry Ahmed Mukhtar, Makhdoom Shahabuddin, Hina Rabbani Khar, Khursheed Shah, Nisar Ali Khan, Samina Ghurki or another person will be appointed Prime Minister under Pakistan’s existing constitutional arrangements. iPredict is also offering a stock on the probability that another event, such as a military coup, may occur prior to a new Prime Minister being appointed.

iPredict works based on the theory of the wisdom of the crowd – that is, that the aggregated opinions of many people will tend to more accurately forecast the future than the views of any individual expert. Insider trading is also allowed on the iPredict market.

Traders can take long or short positions on a wide range of stocks asking whether various events will occur. If the event occurs, those with a long position are paid NZ$1.00 for every stock they hold and those with a short position are paid nothing. If the event does not occur, those with a short position are paid NZ$1.00 for every stock they hold, and those with a long position are paid nothing.

In this way, the price in cents of a particular stock represents the percentage probability of the event occurring.

For example, the stock asking whether Barack Obama will be re-elected President of the United States is currently trading at NZ$0.6470, suggesting a 64.7% probability that he will be. A trader who believes Mr Obama will be re-elected could buy this stock for NZ$0.6470 and would be paid NZ$1.00 if he is, a 55% return between now and November.

Alternatively, a trader who does not believe Mr Obama will be re-elected could short this stock, at a cost of NZ$03530, and would be paid NZ$1.00 if Mr Obama is defeated, a 183% return between now and November.

The eight stocks forecasting the next Prime Minister of Pakistan can also be bought as a bundle for NZ$1.00. The total price of all eight stocks should sum to NZ$1.00 at all times.

iPredict is owned by Victoria University of Wellington and operates under New Zealand law under the Futures Contracts (iPredict Limited) Declaration and Exemption Notice 2008. iPredict traders warrant and undertake that they are 18 years of age or older and will comply will all laws in the jurisdictions in which they are present.

www.iPredict.co.nz
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ENDS

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