What is the Hollywood Stock Exchange?
The Hollywood Stock Exchange is an online prediction market in which “investors” bet on the performance of various components of the entertainment industry. Bets are made using credits called Moviestocks, Starbonds, TVStocks, Movie Funds, Idol Warrants and derivatives. Transactions are made in “Hollywood dollars,” which players receive when they open an account, complete successful transactions, and participate in website quizzes. Each “investment” has a ticker symbol: for example, the symbol Ironman 3 is IRNM3.
Understanding the Hollywood Stock Exchange (HSX)
The Hollywood Stock Exchange game uses specialized virtual technology invented by Hollywood Stock Exchange co-founders and creators, Max Keizer and Michael R. Burns. The stock exchange has existed since 1996 and is owned by Cantor Fitzgerald, which in 2020 launched an actual stock exchange similar to HSX, called the Cantor Exchange.
Previous incarnations of the game included a music market (for the purchase of musical artists), prizes for the best winners and, briefly, a “buy-back” program in which the Hollywood Stock Exchange would reward the best players by buying their wallets priced at $ 1 per $ 1 million of currency if the player registers the wallet to sell on eBay. These features have been removed. The practice of selling wallets on eBay was started by Curtis Edmonds, a former Texas lawyer.
The Hollywood Stock Exchange attracted private investment during the dotcom boom and aired television commercials on cable channels to attract gamers. After the dotcom crash, the exchange was acquired by Cantor Fitzgerald units. Cantor Fitzgerald used Moviestock stock market prizes to help his UK gambling operations, where bettors can place bets on the amount of money American films will bring in.
The Hollywood Stock Exchange and forecast markets
The Hollywood Stock Exchange is generally considered to be a prediction market. Prediction markets are those created to trade on the outcome of events. Market prices can indicate what the crowd thinks about the probability of the event. A prediction market contract is traded between zero percent and 100 percent. It is a binary option that will expire at the price of zero percent or 100 percent. Prediction markets can be considered to belong to the more general concept of crowdsourcing, which is specially designed to gather information on subjects of particular interest.
Prediction markets, which tend to be fairly precise, exist for a wide range of subjects. Some, like Iowa’s electronic markets, trade real money. Lately, prediction markets have become very popular for elections. The fivethirtyeight.com website, which analyzes the likely outcome of elections, among other events, takes into account prediction markets.