How is the Price/Cost of shares determined?
DaVinciTrade has no influence or input regarding the Probability Percentage posted with each Market Prediction nor the price/cost of shares. The Percentage of Probability that the Market Prediction will actually happen is continually updated as a direct result of the purchasing of YES and NO shares by the Members. The last share price paid is the determining factor resulting in a corresponding "percentage probability" posted on each Market Prediction.
All shares trade between .10 cents minimum and $9.90 maximum. If the last shares purchased at $4.45 per share, the YES Probability will be displayed as 44.5%. That means whether there are only two members or thousands of members playing a particular Market, the last price paid by a Member for shares was $4.45 per share. The actual "cost" of shares in this case are as follows; YES shares cost $4.45 each. NO shares always "cost" the difference between the price of the YES shares ($4.45) and ten dollars which in this case is ($5.55) for each NO share. The total of the "cost" of the YES and NO shares always equals $10.00 for each contract.
Examples:
Market - Mickey Rourk will win an Oscar :
66.8% Probabillity
$6.68 Last Share Price Paid
$6.68 Was the "Cost" of the YES share
$3.32 Was the "Cost" of the NO share
$10.00 Amount will be paid to the winner (holder of the shares in agreement with the result)
Market - Barack Obama will be elected President in 2012 :
50.0% Probabillity
$5.00 Last Share Price Paid
$5.00 Was the "Cost" of the YES share
$5.00 Was the "Cost" of the NO share
$10.00 Amount will be paid to the winner (holder of the shares in agreement with the result)
Market - Steelers will win the 2008 Season Super Bowl :
42.3% Probabillity
$4.23 Last Share Price Paid
$4.23 Was the "Cost" of the YES share
$5.77 Was the "Cost" of the NO share
$10.00 Amount will be paid to the winner (holder of the shares in agreement with the result)
Option: A member always has the option to sell his shares early (prior to expiry) to another member.