Predictive Market

DEFINITION of 'Predictive Market '

A speculative market that is based on speculations regarding events, such as who will win an election or whether a sports player will be resigned to a team. All of the "trades" involve a prediction with an unambiguous outcome.

BREAKING DOWN 'Predictive Market '

Many predictive markets are available to the public, and encompass predictions from who will win an Oscar, to trends in the video gaming industry. A predictive market is structured as a betting exchange, and participants bet (trade) on how they expect an event to unfold.

RELATED TERMS
  1. Speculative Risk

    A category of risk that, when undertaken, results in an uncertain ...
  2. Political Futures

    An investment wherein the payout comes after an election, based ...
  3. Predictive Analytics

    The use of statistics and modeling to determine future performance ...
  4. Speculator

    A person who trades derivatives, commodities, bonds, equities ...
  5. Confirmation On A Chart

    An indicator or chart pattern that provides evidence that the ...
  6. Prediction Market

    A collection of people speculating on a variety of events - exchange ...
Related Articles
  1. Trading

    Profit Without Predicting The Market

    Traders who try to predict the future can actually harm their trading options.
  2. Trading

    Pivot Points

    Learn more about this technical indicator and how you can use it as a predictive tool.
  3. Insights

    How Big Data Has Changed Sports

    Big data is transforming sports analytics by helping managers measure individual performance and the most effective game plans.
  4. Financial Advisor

    Predictive Analytics Drives Return for Investors

    A new industry of predictive analysis has developed to make sense of big data and give investors real-time buy and sell recommendations based on the patterns forming in the data long before traditional ...
  5. Markets

    4 Ways To Predict Market Performance

    One school of thought to predicting market performance says, “Don’t fight the tape,” meaning, don’t get in the way of market trends.
  6. Markets

    Understanding Forecasting

    Forecasting is the use of historical data to predict the future.
  7. Trading

    Understanding Trend Analysis

    Trend analysis is the use of past performance to predict future price movement of a security.
  8. Financial Advisor

    How the Election Year Will Impact Your Practice

    Who wins the presidency isn't the only political factor that will impact business and your practice this year. Here's what else to expect.
  9. Markets

    The Basics Of Game Theory

    Break down and examine the potential consequences of economic/financial scenarios.
  10. Markets

    5 Predictions for the Chinese Stock Market in 2016

    Find out why market analysts are making these five ominous predictions about the Chinese stock market in 2016, and how it may impact the entire world.
RELATED FAQS
  1. What is the difference between speculation and gambling?

    Learn about speculation and gambling, examples of speculation and gambling, and the main difference between a speculator ... Read Answer >>
  2. What is the difference between a mutual fund and money market fund?

    Determine whether the Herfindahl-Hirschman index can be used to determine competitive balance in sports. Competitive balance ... Read Answer >>
  3. What is the difference between investing and speculating?

  4. Do speculators have a destabilizing effect on the financial system?

    A speculator is anyone who trades derivatives, commodities, bonds, equities or currencies with higher-than-average risk in ... Read Answer >>
  5. Is technical analysis used only to analyze stocks?

    The simple answer to this question is definitely not. This form of analysis can be applied in more situations than you may ... Read Answer >>
  6. What taxes will I pay if I win a lot of money while gambling in Las Vegas?

    Travel to Vegas and try to win big at the casino; but before you do, make sure you understand the tax laws that govern gambling ... Read Answer >>
Hot Definitions
  1. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  2. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  3. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  4. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
  5. Brexit

    The Brexit, an abbreviation of "British exit" that mirrors the term Grexit, refers to the possibility of Britain's withdrawal ...
  6. Underweight

    1. A situation where a portfolio does not hold a sufficient amount of a particular security when compared to the security's ...
Trading Center