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. Speculation

    The act of trading in an asset, or conducting a financial transaction, ...
  2. Prediction Market

    A collection of people speculating on a variety of events - exchange ...
  3. Confirmation On A Chart

    An indicator or chart pattern that provides evidence that the ...
  4. Speculative Risk

    A category of risk that, when undertaken, results in an uncertain ...
  5. Speculative Flow

    The movement of speculative capital between different assets ...
  6. Spread Betting

    A type of speculation that involves taking a bet on the price ...
Related Articles
  1. Charts & Patterns

    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.
  2. Personal Finance

    The Skinny On Canadian Sports Lotteries

    Putting your money where your mouth is on the favourite team could add some spice to your sports viewing.
  3. Your Practice

    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.
  4. Economics

    Understanding Forecasting

    Forecasting is the use of historical data to predict the future.
  5. Stock Analysis

    These Companies Know The Future Before It Happens

    Wouldn't it be great to have a crystal ball to see into the future?You could know when the next market crash will be, what stocks to buy, and which companies will be the fastest growing.While ...
  6. Technical Indicators

    Understanding Trend Analysis

    Trend analysis is the use of past performance to predict future price movement of a security.
  7. Personal Finance

    Best Sports Bets Of The Year

    If you had bet on these longshots this year, you would have taken home a lot of winnings.
  8. Fundamental Analysis

    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.
  9. Options & Futures

    Market Speculators: More Help Than Harm

    Speculators often get a bad rap, but it's important to remember that they only observe trends, not manipulate them.
  10. Stock Analysis

    Is This The Greatest Investment Discovery We've Ever Made?

    In Friday's StreetAuthority Daily, we featured an interview with InvestingAnswer's newest analyst, Nancy Zambell.In the interview, Nancy explained how she recently discovered a small ...
RELATED FAQS
  1. 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 >>
  2. 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 >>
  3. 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 >>
  4. What is the difference between speculation and hedging?

    Learn about speculation and hedging, the difference between them, and how traders and investors speculate and hedge. Read Answer >>
  5. What is the difference between investing and speculating?

    The main difference between speculating and investing is the amount of of risk undertaken in the trade. Typically, high-risk ... Read Answer >>
  6. What are elves?

    Elves are used to describe the technical analysts that are guests of the PBS show Wall Street Week. The job of these technical ... Read Answer >>
Hot Definitions
  1. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  2. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
  3. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  4. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  5. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  6. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
Trading Center