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| − | I still don't get it.--[[User:One|One]] 6 October 2005 05:32 (CEST)
| + | Older discussions may have been removed by one of the [[Meta:Editors|Editors]] after a long period of inactivity. They will remain in the page history. |
| − | :I will add examples later hopfully that will help. You could also tell me what it is you do not understand. --[[User:Rbl|Rasmus]] 6 October 2005 12:14 (CET)
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| − | My networth has gone from 120, right down to 50, and now it's worked its way back up to 115...and I have absolutely no idea how. Genius :) --[[User:Arithon|Roy]] 6 October 2005 13:56 (CEST)
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| − | Ahh, okay, I'm beginning to comprehend bits and pieces now. I did what the article suggested, and bought some shares at a really low price (10), and then sold them for higher (50), and made myself a little profit. --[[User:Arithon|Roy]] 6 October 2005 16:35 (CEST)
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| − | == Examples would help. == | |
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| − | I want to put money on something that I don't think will happen: Probabilty 10%
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| − | But I'm still unsure where I should be buying or selling. - [[User:Mcsporran|mcsporran]] 7 October 2005 21:36 (CEST)
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| − | :If you really do not think it is going to happen then you should get your hands on as many negative shares as you can. This you do by selling them at as high a price as you can. Preferably as close to 100 as you can. Then you will have the lowest expences selling it. --[[user:rbl|Rasmus]] 7 oct. 2005 21:54 (CET)
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| − | :Thanks, thats about the best explanation I've seen so far. I'm sure I'm not too thick to figure this out.Hope I do before my funds run dry. --[[User:Mcsporran|mcsporran]] 7 October 2005 22:29 (CEST)
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| − | ::Just buy at a lower probability than you think the event has and sell at a higher one. So if you think a claim has a 50% chance of coming true, you might buy 10 shares at 40% for $4. This would be a bargain because if the probability is 50% of the claim coming true, you should on average get $5 out of 10 shares, for a profit of $1. You might also sell 10 shares at 60%. This will cost you 4$ and get you -10 shares, which should on average give you $5 for a profit of $1 since the claim has a 50% chance of being false. It could also happen that both of your buying and selling orders get taken up by someone, in which case you make a profit of $2 before the claim is even judged. --[[User:Mcglynn|Mcglynn]] 8 October 2005
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| − | == Can a profit be made trading negative shares? (Example needed) ==
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| − | I'm a bit confused about whether it is possible to make a profit from negative shares before the bet is judged. If I bought 10 shares at 40% I would have 10 shares and be down $4 (in cash) from where I started. If the market goes up and I sell my 10 shares for 60%, then I end up with 0 shares and up $2 from where I started. Everything makes sense to me with positive shares. Now lets say instead that I found a bet that I'm sure will be judged false. I want to pick up some negative shares, so I sell 10 shares at 60%. This leaves me with -10 shares and down $4 from where I started. If the market moves down, the value of my negaitve shares goes up since it seems more likely that the bet will be judged false. If I don't want to wait for the bet to be judged, is there a way to take my profits and leave? If I simply buy 10 shares at 40%, then I would seem to be left with 0 shares and down $8 from where I started. What am I missing here -- [[User:Mark|Mark]] 8 October 2005 06:38 (CEST)
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| − | : If you have negative shares in a market, you sold say 10 shares (that you don't have) at %50,for $5. Later on when more people agree that the event will not happen, the price will drop to say 10%, as people expect these shares to soon be worthless, they will gladly let you buy them. So you buy 10 shares at 10% for $1. Profit $4. I think. I'm still floundering and have made some very bad trades. --[[User:Mcsporran|mcsporran]] 8 October 2005 15:02 (CEST)
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| − | :: Except that, AFAIK, I'm still down since I end up with 0 shares, but have spent $5 total. == [[User:Mark|Mark]] 8 October 2005 20:15 (CEST)
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| − | ::: Step one was selling shares, so you gained $5, buying the shares then cost you $1, so $4 profit. -- [[User:Mcsporran|mcsporran]] 9 October 2005 17:09 (CEST)
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| − | :::: I just tried this. I sold 1 share of the HESRV bet for 91%. This decreased by dollar balance by $0.09, but I have 1 negative share worth $0.09, so my net worth has remained the same. Of course that -1 share is only worth anything to me if either the bet is judged false, in which case I receive $1.00, or if I can somehow sell the negative share. The way I can get rid of a negative share is by buying a (positive) share. So lets say that something happened which makes the market doubt if the Highland empire will survive, so I can now buy a share for 10%. If I buy that share for 10%, then I have to pay $0.10. This leaves me with 0 shares in HESRV, and puts my net worth down $0.19 ($0.09 from when I sold for 91%, and $0.10 from when I bought a positive share for 10%). Clearly I can make a profit if I hold onto the share and it is judge false. If somebody knows how to trade negative shares for a profit, I'd like to see an example of it since I just can't make the math work out. -- [[User:Mark|Mark]] 9 October 2005 19:15 (CEST)
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