Prediction Market

AAA

DEFINITION of 'Prediction Market'

A collection of people speculating on a variety of events - exchange averages, election results, commodity prices, quarterly sales results or even such things as gross movie receipts. The Iowa Electronic Markets, operated by faculty at the University of Iowa Henry B. Tippie College of Business are among the better known prediction markets in operation.

INVESTOPEDIA EXPLAINS 'Prediction Market'

Because they represent a wide variety of thoughts and opinions - much like the markets as a whole - prediction markets have proven to be quite effective as a prognostic tool. As a result of their visionary value, prediction markets (sometimes referred to as virtual markets) have been utilized by a number of large companies - like Google, for example.

RELATED TERMS
  1. Unbiased Predictor

    The notion that the current market price of a physical commodity ...
  2. Trending Market

    A market that is trending in one direction or another. A bull ...
  3. Futures Market

    An auction market in which participants buy and sell commodity/future ...
  4. Futures

    A financial contract obligating the buyer to purchase an asset ...
  5. Tracking Stock

    1. Common stock issued by a parent company that tracks the performance ...
  6. Trend

    The general direction of a market or of the price of an asset. ...
Related Articles
  1. An Introduction To Consensus Indicators ...
    Active Trading Fundamentals

    An Introduction To Consensus Indicators ...

  2. Profit Without Predicting The Market
    Trading Strategies

    Profit Without Predicting The Market

  3. Trading Psychology: Consensus Indicators ...
    Options & Futures

    Trading Psychology: Consensus Indicators ...

  4. Heikin-Ashi: A Better Candlestick
    Charts & Patterns

    Heikin-Ashi: A Better Candlestick

comments powered by Disqus
Hot Definitions
  1. Ghosting

    An illegal practice whereby two or more market makers collectively attempt to influence and change the price of a stock. ...
  2. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  3. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  4. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  5. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  6. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
Trading Center