What Are Financial Prediction Markets?

Predicting. An innate human trait. Predictions are the basis for some of our even most trivial actions. In fact, it is time we move on from being called Homo Sapiens to Homo Predicens: the predicting man!

Analytical predictions are the professional backbone of analysts and brokers in the stock markets, commodities markets and all other financial markets. What separates prediction from guessing or betting is the knowledge, real, acquired or perceived. While prediction is weighing information, evaluating, and deriving a likely outcome, guessing or betting, on the other hand is selecting an outcome not based on knowledge. In reality, however, there is almost always a bit of both: predicting and guessing. At times, we think we are predicting which in fact is guessing, while in other cases we may be combining elements of guessing and predicting.