Hollywood Stock Exchange |
| Credit: The Riverdale Review |
What does it mean?
• The Hollywood Stock Exchange (HSX) is an online prediction market in which "investors" bet on the performance of various components of the entertainment industry. The bets are made using credits called Moviestocks, Starbonds, TVStocks, Movie Funds, Idol Warrants, and derivatives.
• Trades are made in "Hollywood dollars," which players receive when they open an account, make successful trades, and participate in the website's quizzes. Each "investment" has a ticker-like symbol: For example, the symbol for Ironman 3 is IRNM3.
Understanding the Hollywood Stock Exchange
• The Hollywood Stock Exchange game uses virtual specialist technology invented by Hollywood Stock Exchange co-founders and creators Max Keiser and Michael R. Burns.
• The exchange has been around since 1996 and is owned by brokerage firm Cantor Fitzgerald, which launched a real-world exchange similar to HSX, called the Cantor Exchange, in 2010.
• Previous incarnations of the game included a music market (for purchasing musical artists), prizes for top gainers, and briefly, a "buyout" program in which the Hollywood Stock Exchange would reward top players.
The Hollywood Stock Exchange and Prediction Markets
• The Hollywood Stock Exchange is generally considered a prediction market. Prediction markets are those created to trade on the outcome of events. The market prices can indicate what the crowd thinks the probability of the event is. A prediction market contract trades between 0% and 100%. It is a binary option that will expire at the price of 0% or 100%.
• Prediction markets, which tend to be quite accurate, exist for a wide range of subjects. Some, like the lowa Electronic Markets, trade in real money. Lately, prediction markets have become quite popular for elections. The website fivethirtyeight.com, which analyzes the likely outcome of elections, among other events, factors in prediction markets.
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