Natural bettors on the relative price change of stocks include those holding strong beliefs of results, due to either or both reports of company developments, or a market recognition of a change in circumstance.
Those in the business of making stock price performance predictions should logically be willing to bet that stocks they are recommending will do better than the SP500 index in a 180 days or even shorter periods. If not, they shouldn’t be making a purchase recommendation. They would not have to, though they could, bet that the recommended stock would do more than beat the performance of the SP500 in the agreed period. Of course, their willingness to bet that the performance of the recommended stock would double that of the SP500 would be more impressive and likely be attractive to a greater number of counterparties. The fact that they are willing to bet several betting units, at a substantial performance superiority level, could become known and serve as an indication of the strength of their belief.
Those companies selling shares could bet that the shares would outperform the SP500 or shares of other identified companies, within a betting period. Their bet would both indicate a belief, as well as be a penalty if the belief proved to be wrong.
Those having a belief that certain company impacting events would be announced during a standard betting period could make a bet, which would not involve any transaction of securities. Even though the bet would be based on the relative performance of a SP500 listed stock versus either another stock, or the SP500 index, no securities transactions would be involved.
Those believing the SP500 index would decline within one of the standard periods, could seek counterparties willing to bet that their chosen stocks would decline less than the SP500 index. Similarly, those believing the SP500 index would increase could seek those willing to bet that their chosen stocks would outperform the SP500 index, either even or by an agreed percentage of the SP500 index.
The essence of the stock price wagering program we envision is that the betting units are standard priced, based on the published last sale, as occurring on the last trading day of the stock’s primary market, and require both counterparties to deposit the $200 betting unit price with the broker arranging the transaction.
Arthur Lipper, Chairman
British Far East Holdings Ltd.
14911 Caminito Ladera,
Del Mar, CA 92014
+1 858 793 7100
arthurlipper@gmail.com
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