Friday, March 12, 2010

Cantor Exchange

Here is something right up my in-law's alley - legal online gambling.

If you haven't heard, Cantor Exchange received regulatory approval on a movie futures exchange. It's slated to start up this spring. What is that, you ask?

A movie futures exchange is where you can bet on the box office success of forthcoming movies. Let's see how this works.

First let's get some terminology right. Futures contracts are what you're buying and selling. Each $1 in contract is $1 million in box office revenues. Bid means you want to buy a contract. Offer means you're willing to sell a contract. Got it? How about an example.

Let's say you bid $50 for a futures contract on Shrek Forever After. This means that you expect Shrek Forever After to have $50 million on box office revenue, or hopefully more. If Shrek Forever After comes in with $55 million, you get to buy it for $50 and make $5 bucks.

In this example, the person who took the offer end of the deal lost $5. However, if Shrek Forever After came in with $40 million, then the offer makes $10 while the bidder looses $10.

Buying and selling futures can be very risky so I don't recommend this to anyone with a weak stomach. However, if you are willing to take a few small risks, and are up on your movies (Scooter?) then this might provide good entertainment.

2 comments:

t-snide said...

Not to be pedantic, but I have a feeling you meant "in-laws'" and not "in-law's." :)

Scooter said...

Hell no. I like movies, but not that much. Is the point to raise money for movies somehow?