For those that have been trading for a while you'll remember I used to do prizes on RealityMarkets and that I've also been saying for a while that prizes would be returning. They are back today. Right now I am giving away 3, $10 gift certificates to iTunes to the top 3 traders from the last 14 days as of the trading close on Tuesday. The list is attached.

Going forward I hope to do smaller prizes to more people more frequently than just one large prize every few months. I also want to give prizes away for different categories, ie most trades, biggest loser, most referrals, etc. At this point I'm not quite sure if I am going to do formal contests or just do random dates.

Let me know what you think about contest dates and anything else.

I've updated the index names in the navigation menu while still preserving the longer name when you view the index. I'm hoping this improves the navigation and makes it easier to find things at a glance. Let me know what you think.

I've also changed around some html so if anything looks weird let me know.

Thanks.

I published a post on Midas Oracle that has some more details on our relationship with Intrade. Here is an excerpt:

On Wednesday, RealityMarkets.com and Intrade announced a collaboration agreement, the center of which was the announcement of Standard Markets. The press release to the announcement is linked below but I wanted to use this post to talk a little bit more about what was behind the collaboration.

The rest is here: Reality Markets and InTrade announce collaboration

DUBLIN/PARK CITY, May 28, 2008 -- Intrade and Reality Markets announced today that they have reached an understanding to explore areas of collaboration that would mutually benefit the memberships of both prediction market platforms and prediction market users generally.

These include:

• The adoption of a standardized event market specifications starting with Reality Markets listing Intrade markets and prices on its platform
• Cooperation in developing future event market categories and contracts
• Cooperation in exploring the feasibility of each exchange offering the other's markets and market data.

Intrade CEO John Delaney said, "We are very pleased to pursue areas of common interest with Reality Markets and all prediction market platform operators.  For prediction markets to achieve their full potential, moving closer to a seamless marketplace will become ever more important to market participants.  We look forward to working with Reality Markets and other platform operators to expand the availability of standardized markets and specifications to prediction market users."
 
Brad Stewart, Chief Executive Officer of Reality Markets said "Intrade is considered the leading prediction market platform and we are very pleased to co-operate with them.  By adopting a common event market specification we will make it easier for users of prediction markets to observe arbitrage opportunities, and move between platforms to exploit these opportunities and improve the quality of the information."
 
About Intrade: Intrade is the worlds leading prediction market platform.  Members trade on unique markets and by so doing generate information on the likelihood of the underlying event occurring. Intrade and the predictive information generated by its members have been featured on ABC, CNBC, FOX, CNN, Bloomberg, Fortune & others.   Subscribe to Intrade News on RSS: http://www.intrade.com/news/newsRss.xml
 
Contact: John Delaney, CEO, Intrade
Telephone: 011 353 1 6200 300
Email: john.delaney@intrade.com
www.intrade.com

About Reality Markets: Reality Markets is a prediction market trading platform.  Members are able to trade on events markets that they are passionate and opinionated about.  By aggregating the predictions of the diverse community of participants, Reality Markets and its members generate accurate predictive information on the likelihood of specific events occurring.  
 
Contact: Brad Stewart, CEO, Reality Markets
Telephone: 435-602-9142
Email: brad@realitymarkets.com
www.realitymarkets.com
 
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I was reminded today by the Freakonomics Blog on the New York Times that we botched the American Idol Prediction. While our chart shows eventually we had David Cook as the winner, it was primarily because of a few last second trades that went in before we could pause the market.

So, what went wrong? As someone that can see the trades that occurred and the activity on the contracts, the biggest thing that jumps out is the lack of volume and activity. In order for a market to trade efficiently they need to be liquid and there needs to be an adequate amount of traders in that market.

Regardless, I think there is still important information that can be learned from this market. While David Archuletta was in the lead for nearly the entire series, David Cook started making steady gains against him around the 5th of May.

Additionally it's important to remember prediction markets aren't guaranteeing someone will win if they have the highest price, merely stating a probability. The day before the final show David Archuletta had dropped down to 80% which means there was still a 20% chance he would lose.

Combine that with the fact that Archuletta's lead was continuously decreasing the last couple weeks and I think you can make an argument that there is still value in the information the market provides.

Parts of this post appeared in the comments section of the Freakonomics Blog

Some great reading to help in your choices on whether or not Steve Ballmer will be leaving our favorite technology monopoly: Does Ballmer Need To Go?

Market Question: Will Steve Ballmer Stay At Microsoft As CEO Through The End Of The Year?

Our market here, Will Hilary Clinton Drop Out Before The Democratic National Convention?, looks pretty convinced that Hilary won't be dropping out before the convention but here are a couple blog postings as food for thought on her dropping out:

Should Hillary Clinton Drop Out? Maybe She Should ... Maybe She Shouldn't.
Howard Dean Watch: Either Hillary or Obama MUST Drop Out After June Primaries

As you can already tell, there's been some visual site updates to the site but I've also added some behind the scenes changes.

A recap of the changes.

1. New homepage graphics and modified layout.

2. Broke up the comment and stock summaries on the homepage into tabs accessible via the "View: Market Activity | Comments & Site News" links below the main graphic.

3. Improved side navigation. Clicking on the word in the navigation menu will take you to a page showing all the index questions related to that category. If you liked the old way with the drop down menus, just click the plus sign at the end of each category and you will get the original drop down menu.

4. Improved the input fields for stock comments and trader comments.

5. Comment email notifications. When someone responds to a comment you left on a stock or trader profile you will receive an email telling you so. You can turn this feature off in your account info page.

6. Payout email notifications. When a stock you own pays out you will receive an email notification highlighting what you made or lost similar to the trading messages you already receive. You can turn this feature off in your account info page as well.

It seems RealityMarkets traders aren't the only ones predicting David Archuleta will win American Idol 7. Here's an excerpt from the American Idle blog:

Trade publications are beginning to admit that David Archuleta has Idol 7 in the bag. While I wouldn't go that far in proclaiming him the winner, I will say he has a good chance. Just look at his target audience and the sheer numbers below. This is a really flippin' long story but I'll give you the highlights. The story makes sense.

Read the rest here.

Some of you may have noticed a change this week to the account portfolio page that added a short position category to your portfolio and were wondering how to actually short a stock. Starting today you will be able to enter short orders on the trade screens where all your other orders are entered. Just select it from the drop down menu where you normally select buy or sell. A Short is how you open a short position and a Cover is how you close out a short position. Beware, if you Cover a short position and the price is higher than when you opened the short position, you will owe money to close it out.