How to calculate the price of an order from the stake I want?

hillary

Buying shares because you think an event will occur:

Let’s say you want to bet 1 Bitcoin on “Hillary Clinton to win US Presidential Election 2016” because you think Hilary will be elected. This means you need to buy shares of this contract.

Let’s consider different scenarios depending on the price per share you’re willing to pay:

  • If you buy shares at 3mB each, then you need to buy 333 shares (333 * 3mB = 1Bitcoin).
    – If you win (i.e Hillary is elected), you will win 10mB per share, so you will win 333 * 10mB = 3330mB = 3.33 Bitcoins (making a 2.33 Bitcoin profit)
    – If you lose (i.e Hillary is not elected), you lose the price you paid for the shares: 333 * 3mB = 1Bitcoin
  • If you buy shares at 4mB each, then you need to buy 250 shares (250 * 4mB = 1Bitcoin).
    – If you win (i.e Hillary is elected), you will win 10mB per share, so you will win 250 * 10mB = 2500mB = 2.5 Bitcoins (making a 1.5 Bitcoin profit).
    – If you lose (i.e Hillary is not elected), you lose the price you paid for the shares: 333 * 3mB = 1Bitcoin
  • if you buy shares at 5mB each, then you need to buy 200 shares (200 * 5mB = 1Bitcoin).
    – If you win (i.e Hillary is elected), you will win 10mB per share, so you will win 200 * 10mB = 2000mB = 2 Bitcoins (making a 1 Bitcoin profit)
    – If you lose (i.e Hillary is not elected), you lose the price you paid for the shares: 333 * 3mB = 1Bitcoin

So basically, if you buy a contract, you will win 10mB for each share of this contract you own (if you’re correct).

Selling shares because you think an event will not occur:

Let’s say you want to bet 1 Bitcoin against “Hillary Clinton to win US Presidential Election 2016” because you think Hilary will not be elected. This means you need to sell shares of this contract. Read here if you want to see why you can sell shares without owning any.

  • If you sell shares at 7mB each, then you need to sell 333 shares (333 * (10mB – 7mB)) = 1Bitcoin).
    – If you win (i.e Hillary is not elected), you will win 7mB per share, so you will win a 333 * 7mB = 2331mB = 2.3331 Bitcoins profit (you also get you stake back of 1 Bitcoin).
    – If you lose (i.e Hillary is elected), you lose 333 * (10mB – 7mB) = 1Bitcoin.-
  • If you buy shares at 6mB each, then you need to buy 250 shares(250 * (10mB – 6mB)) = 1Bitcoin).
    – If you win (i.e Hillary is not elected), you will win 6mB per share, so you will win 250 * 6mB = 1500mB = 1.5 Bitcoins profit (you also get you stake back of 1 Bitcoin).
    – If you lose (i.e Hillary is elected), you lose 250 * (10mB – 6mB) = 1Bitcoin.market depth
  • if you buy shares at 4mB each, then you need to buy 166 shares (166 * (10mB – 4mB)) = 1Bitcoin).
    – If you win (i.e Hillary is not elected), you will win 4mB per share, so you will win 166 * 4mB = 666mB = 0.666 Bitcoins profit (you also get you stake back of 1 Bitcoin).
    – If you lose (i.e Hillary is elected), you lose 166 * (10mB – 6mB) = 1Bitcoin.​

So if you sell a contract (because you think an event will not occur), you win the price you sell for.

Setting your own price

In Predictious you can set your own price per share. If you set a buy price per share too low (high return), there might be a risk that noone matches your bet (your open order won’t be matched and you won’t own any share).
If you click on the Market depth tab, you can see the available ask/bid price (for example someone is selling 9 shares at 3.92mB; 2 shares at 4.38mB, etc. while someone else is buying 6 shares at 3.25mB, 4 shares at 3.13nB, etc.).

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