Intrade - Making Money Online, Not The Usual Way

photo credit: Chris Rickels

You might have heard about Intrade, the website that swept the world of gambling and created controversy. It’s based in Dublin and quickly became one of the biggest prediction markets out there.

Everybody talks about making money online, but it’s usually not about prediction markets at all. I think we should include them in the MMO “talk” as well…  

What Is Intrade? 

“Intrade.com is a person-to-person trading “Exchange”. It allows you to trade in the most innovative, transparent and exciting way on financial, sporting, current events, entertainment and many similar events. intrade members trade directly with each other, bypassing the middle-man. When you trade on intrade you are pitting your wits against other members of intrade. […] The winning member will receive the profits, the losing member pays the loss. […] Odds/Prices on intrade are usually much better than those available elsewhere, as the prices are established by you and other intrade members at prices you want to trade at.”  - Intrade

I thought I’d simply put their words first, that’ll give you a pretty good idea what they’re all about.

How Does Intrade Work?

Being a prediction market, it offers bets on current events, anything from politics, to entertainment.

It works like this: a certain statement is made, and sold in what is called a “contract”. Contracts are started about any current event. For example “Barack Obama will be the next president”. These contracts are sold at a certain number of points, from 0 to 100. Each point is worth 10 cents usually, though the money value can vary.

Based on the collective opinion, the odds increase or decrease the price of a contract. A contract can start at 10 points, and as the chances increase, end up at 80. That means there’s a 80% chance that the event will happen. If the event does happen, the contract will be worth 100 points. So if you bought it at 10 points, or one dollar, you now have 10 dollars. The person that took your bet has a loss of 90 points, and owes you. You don’t have to pay anything until the outcome. When you bet 10 and at the end win, you’ll basically get 90 points. If you lose, you’ll have to pay the 10 points to the person you bet against.

Conclusion

In 2004, Intrade predicted the presidential vote of every state (except Alaska), in 2006 predicted the outcome of every Senate race. It’s been amazingly correct, more than any other poll. I guess it does make a difference if you put your money where your mouth is, and bet on it.

Although many criticize Intrade for being flawed, it has had a huge growth in popularity and it’s here to stay, at least for a good while. I think it’s a fun way to gamble your money, and with far better chances than playing the slots :).

So if you’re so sure about something, that you’re willing to bet your money on it, why not try Intrade? You can even practice there for free until you get the hang of it.

I hope you’ve enjoyed! Leave me a comment. What do you think about Intrade? Have you ever tried it? Would you? Have you tried any other prediction market or futures market?

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