Brokerhouse.predictionmarket.2010

Expires at $10 if an exchange neutral brokerage account is available to the general public on or before 11:59 PM, December 31, 2009 otherwise expires at $0.00

Do event future brokerages houses have a future in the prediction market industry? I personally enjoy signing directly on to my exchange account and placing my own orders and I certainly don’t want to pay any needless fees to a middleman. However, if brokerage houses offered just a few values added services,--better account management; interest on cash balance; access to custom trading platforms—it would entice me to give up my exchange accounts in favor of a brokerage account. The ability to fund and manage a single account, allowing traders to find and trade contracts from multiple exchanges, would be one major benefit of a brokerage account.

There are many contracts I choose not to trade, due simply to the requirement to open and manage separate account for each exchange. Furthermore, even if I did have accounts at multiple exchanges, the periodic need to transfer funds between accounts would likely reduce the quantity of contracts I would be able to purchase hassle free. In addition, traders could be attracted to use brokerage accounts if they offered appealing account management features. For instance, qualifying to earn interest on cash balances or margin trading with an exchange account is currently out of reach for most traders. Moreover, convoluted rule and fees associated with account funding make the most basic tasks of depositing and withdrawing funds irksome.

Finally, brokerage accounts could provide traders with superior trading platforms, integrating news, research tools, and contract quotes from multiple exchanges. Clearly, competition between brokers entering the prediction market would lead to better service and account management features for traders. However, what is the probability that brokerage account will be commercially viable before 2010? The amount of legal and political obstacles coupled with financial risk any entrant to this market would face, all but guarantees no established brokerage house would come anywhere near this market for the foreseeable future. On the other hand, this young industry has proven to be incredibly nimble, innovative and technology savvy. Despite a hostile legal environment, in the just the past three years the industry has witnessed the birth of several exchanges who have build a world wide customer base, and processed well above a billion dollars in traded contracts. Perhaps, even more promising is the eagerness of the industry to embrace bleeding edge technology and strategic partnerships; which have already led to availability of commercially viable 3rd party trading platforms. As a result, the door to great profit opportunity is wide open to any entrepreneur around the globe willing to risk financial ruin and possible criminal prosecutions. Recommendation: Buy bellow/Sell above $3.00.