NewsFutures has (always had) an interesting feature in its user interface that I want to highlight. I want to explain the difference so I can rely on it in my explanation of other market formats. Whenever they create a new (binary) claim, they write a description of each outcome phrased in positive terms. When they offer a claim on the San Jose Sharks playing the Los Angeles Kings (tonight at 7:30), the two positions are “Kings over Sharks” and “Sharks over Kings”. Whenever you are looking at the market screen that allows you to buy claims, you only see one side of the market (“Sharks over Kings”, for concreteness). If you don’t have a position in the claim, you can only buy the claim. If you have positive assets (from this viewpoint), then you are also offered the option of selling some. But there’s always a button that lets you look at the claim from the opposite point of view. Once you click the button, you see things from the viewpoint of “Kings over Sharks”. If you don’t have any assets, or all your assets are in “Kings over Sharks”, You can still only buy.

When you switch viewpoints, the prices in the order book invert. if the prices were X$65 offered and X$93 asked when looking at “Sharks over Kings”, then it will be X$7 offered, X$35 asked when looking at “Kings over Sharks”. I really like this way of presenting the prices, but it shouldn’t apply only to binary outcomes. It’s useful to be able to think of the prices inverting in this way when you talk about multi-outcome claims as well.

The most common way to present a single binary outcome is to phrase the question in a positive sense, and have a single scale for quoting odds. This means that people betting against the proposition have to subtract from 100 to figure out how much they’re spending or earning.

NewsFutures’ interface simplifies this interaction for the user. There’s a secondary benefit, in that it’s particularly helpful to the seller, and people are more reluctant to bet against outcomes than in favor of them.