Popular Science

PPX? What's that?
"PPX" stands for "The PopSci Predictions Exchange," a virtual stock market where the stocks are the future of science and technology. Think the iPhone will be the greatest hit since sliced silicon? Buy! Think the International Space Station will never get built? Sell!

Register here to join the PPX. It's fast and free, and we promise we won't give away your personal info to anyone else. Everyone starts with $250,000 PopDollars, the currency of the PopSci Predictions Exchange. You can then invest some or all of your money into one of the many FutureStocks we offer. Some FutureStock predictions relate to long term events, and others are happening this month or this year. There are lots to choose from, and we're offering new propositions all the time.

In the tutorial we use this fake proposition as an example: Flux capacitors will go on sale in the U.S. before Jan. 1, 2010. If you think this is going to be true, then you would buy the security and watch its value rise. If you don't think its true, then you would short the security and make money as it falls.

What does "short" and "cover" mean?
You know the maxim "Buy low, sell high"? Well, if you think the price of a proposition will go down, not up, you can "short" that prop and make money as it falls. Here's how it works: When you short a prop, you borrow shares and sell them to another buyer. Eventually you must repay, or "cover," the shares you've borrowed, by buying more shares at the new (and hopefully lower) price and returning those shares to the lender. Your net profit is the difference in price between the shares when you "short" them and when you "cover" them. So not only can you buy low and sell high, you can short high and cover low.

If you short 100 shares of a propostion that's trading at POP$40, you pay POP$4,000 from your cash at the time of the short. If the proposition goes to 0 (meaning it doesnt come true), your position automatically cashes out and you'll get POP$4,000 (your original investment) plus POP$4,000 (your profit which comes from 40 - 0 x 100shares) for a total of POP$8,000 added to your cash balance.

The answer to the proposition I'm interested in won't be decided until 2050. What gives?
Long-term propositions are an important part of the market. Even though the exchange in its current form (or the Internet in its, for that matter) may not even be around in 50 years to see a long-term prop finally pay out, you can still profit greatly from trading it because its price will always serve as an indication of whether or not the market thinks the proposition will eventually come true. Take the "Will Androids Defeat a Team of Humans in Soccer by 2050?" proposition as an example. We won't know the answer to this one for quite some time, but if next week, Honda were to demo its humanoid robot ASIMO's amazing new ability to run and kick a soccer ball at the same time, the price of this stock is probably going to jump. And if you're holding shares, you've just made some money.

What's a limit order?
A limit order is a way to automatically buy or sell a given number of shares of a proposition based on its price, allowing you to make smart trades at the right strategic moment without having to keep an eye glued to the market at all times.

Let's say a proposition you're interested in has been fluctuating between POP$50 and POP$75. If you know you want to buy, but only when the price reaches the low end of where it's been fluctuating, you can set a limit order for 100 shares at POP$55. This means that the moment the stock's price drops a penny below POP$55, the market will automatically buy 100 shares of the stock for you. Same goes for selling: If you wanted to sell your shares near the high end, you could set a limit order to sell 100 shares when the price reached POP$70. A limit order's expiration date governs how long it will remain in effect-anywhere from one day to one month.