Popular Science

Welcome to PPX: The PopSci Predictions Exchange, where you can buy and sell the future!
In this tutorial, you'll learn how to compete with your fellow traders by betting on the future of science and technology, and fill your portfolio with virtual cash when your predictions pay off.

How to Start Trading
Your first step is to get familiar with the Market and what is traded on it. A FutureStock is the most common security available. It is posed as a question asking whether or not a certain event will occur at some point in the future. Each stock has a value in our virtual currency (Pop Dollars) of between POP$0 and POP$100, which serves as an indicator of the market's opinion on the question posed-lower prices mean the market thinks the answer to the question is "no," higher prices indicate "yes."

In our example FutureStock shown here, the question posed is "Will Brown Industries offer the Mark V Flux Capacitor for sale before 2010?" It's currently trading at POP$52.50, meaning the market is of a mixed opinion on whether the answer is "yes" or "no." This also means it's a great time to jump in and make a trade.



To do so, you'll need to answer the question posed. If you think the answer is "yes," you'll want to buy shares of this stock. Assuming others think similarly, the price of this stock will increase, and your portfolio will gain value.

When the answer is no, SHORT!
Conversely, if you believe the answer is "no," you can short the stock. This is a bet that the price of the shares will go down. In market terms, you'll borrow a specified number of shares of the stock at the current market price (here, POP$52.50) from our friendly MarketMaker robot which will then immediately sell them for you to the next trader who wants to buy (this is handled automatically). If, in a week, the price of the stock drops from POP$10 to POP$42.50, you can choose to "cover" some or all of your short, effectively buying the same amount of stock at the reduced price and giving it back to the MarketMaker robot to repay your loan. Your profit is the difference in price between when you short and when you cover.

Put simply, your profit margin on a shorted stock is (purchased price x number of shares) - (price at cover x number of shares). Isn't everything a little easier with a nice equation?

You'll also notice that our example future stock has a date by which the answer to the question posed will be known in the real world. If, come January 1, 2010, flux capacitors have gone on sale, the proposition will be true and everyone holding it will get POP$100 added to their account. If it turns out to be false, everyone holding it will get nothing. Before January 1, 2010, you can buy and sell this FutureStock for the market price and still turn a profit.

The more likely other traders think it is that the FutureStock will turn out to be true, the more money they'll pay for it, and the higher the price of the stock will be. If other traders think it's less likely, they'll sell and drive the price down. As with the real stock market, the object of the PopSci Predictions Exchange is to buy low and sell high, adding money to your PPX account. You can research FutureStocks on the individual security's page, where we link to articles across the Web via RSS. You can also discuss propositions with your fellow traders on the PopSci forums.

IPOs: New Questions, Fresh Opportunities
We'll roll out new FutureStocks onto the market on a regular basis, always starting at the neutral price of $50 per share. These are called IPOs, short for "initial public offerings." The Calendar section of the site will announce when you'll be able to trade these new securities, so that you can have plenty of time to research your position. Savvy traders stay on top of the news so that they can get in on the ground floor of the latest opportunity.

What happens next?
That's up to you and your personal investing style. The price of each FutureStock will rise and fall depending on the trades made by competing players. At any time, you can buy more shares or sell the ones you have. You have complete control.