assuming that this isn't raiding accounts as a prelude to shutting down (as a number of forumers claim)
Not that I think that it is impossible for this to be the truth; I just think it unlikely:
(My reasoning for the jump is that a year doesn't suffice to drain the dormant accounts at $60 a year, but two would drain most, and then the shut-down becomes a real possibility; and Intrade seems to've long been a marginal concern independent of any ill effects from this fee change.)
Contracts on "the market ceases to operate and this contract becomes worthless" should be seriously underpriced, no?
(edit: whoops, didn't even look at the links)
Those are PB.com predictions; Intrade.com doesn't have such contracts as far as I know and I certainly wouldn't buy any contracts if they did, the new fees aside.
Wouldn't you expect contracts on the market ceasing to exist to be seriously underpriced?
Thanks for the warning. For my part, it sounds like a plan to drain the idle accounts, which mine is (started in August '08, last trade was in June '09). I'll probably just cash out.
You're welcome; once you've cleared out, maybe you could write up a retrospective - what you traded, how much you profited, lessons learned etc. Perhaps not worth a main article, but perfectly good Discussion area material.
Probably the only important thing to say was how they screwed me on a swine flu bet. I bet that it would reach (IIRC) 10,000 cases in the US by the end of June '09. The bet specified that it would be determined by something like "the best estimates available at the time, as reported in major media sources". Then CDC decided to quit updating its current estimate two weeks before the deadline (while still below 10k), InTrade ruled that it could take the CDC's last update as the determinant, and so it ended the contract at zero (i.e. against me). This was despite all mainstream sources at the time reporting a confirmed count over 10k by the deadline.
Interesting. Getting rid of the old fee structure actually opens up some potentially lucrative Dutch book action- but I don't know if there is enough action to support a large enough Dutch book that it would be worth the account charge. I guess I'll check again when the contract deadline gets closer.
For some time now I've traded on Intrade after some successes on the IEM. Recently, Intrade announced a new fee structure - instead of paying a few cents per trade, one has free trading but your account is charged $5 every month or $60 a year (see also the forum announcement).
Initially, this didn't seem so bad to me, but then I compared the annual cost of this fee to my trading stake, ~$200. I would have to earn a return of 30% just to cover the fee! (This is also pointed out by many in the forum thread above.)
I don't trade very often since I think I'm best at spotting mispricings over the long-term (the CA Proposition 19 contract (WP) being a case in point; despite being ultimately correct, I could have been mauled by some of the spikes if I had tried only short-term trades). If this fee had been in place since I joined, I would be down by $30 or $40.
I'm confident that I can earn a good return like 10 or 20%, but I can't do >30% without taking tremendous risks and wiping myself out. So this new fee structure means that I am basically going to do a little trading in January, since I've already been charged the first $5, and then will cash out at the end.
And more generally, assuming that this isn't raiding accounts* as a prelude to shutting down (as a number of forumers claim), Intrade is no longer useful for LessWrongers as it is heavily penalizing small long-term bets like the ones we are usually concerned with - bets intended to be educational or informative. It may be time to investigate other prediction markets like Betfair, or just resign ourselves to non-monetary/play-money sites like PredictionBook.com.
* When I submitted my withdrawal request for my balance, I received an email offering to instead set my account to 'inactive' status such that I could not trade but would not be charged the fee; if I wanted to trade, I would simply be charged that month's $5. I declined the offer, but I couldn't help wonder - why didn't they simply set all accounts to 'inactive' and then let people opt in to the new fee structure? Or at least set 'inactive' all accounts which have not engaged in any transactions within X months?