Day Trading with inTrade

So you think Obama might win this years election? Gas prices going to hit $5 by the end of the year? What if you bought stock with those predictions? Well now you can, with “intrading”. If there was a term for this, I’d have to say this would be called “Social Stock Trading”.

InTrade isn’t such a bad idea, there was a study about using the “Wisdom of Crowds“. The idea is, a crowd of people guessing what an outcome of an event, or some sort of subject, will come up with the most likely answer.

Setting up the account was simple, and they even give you a $5000 test account. Day trading couldn’t get any easier.

“Day trading refers to the practice of buying and selling financial instruments within the same trading day such that all positions will usually (not necessarily always) be closed before the market close of the trading day. This is different from After-hours trading. Traders that participate in day trading are called day traders.”

The general idea of how the inTrade system works is, the number you see in green is the percent of chance “the crowd” thinks the event will occur. If you don’t think there is a chance that will occur, you will sell. If so, you can buy at the current ask price. At the end of the event, if you purchased the stock at 75.0, the event will close at 100, earning you 25 points. Each point is worth $.10

Another scenario, if you buy at 25.0 , you can set a sell price for say, 35.0. As the stock rises and people start buying, someone will pick it up at your price. Netting you 10 points for each option you held.

On a side note, for each option you sell, inTrade charges you .05 for each one you sell. I believe the same goes for purchases. That’s probably the reason for making sure each sell order is in .1 increments. I also noticed there were some charges when I made my initial bids. They also have some promotions on getting free trades, but haven’t gotten that far.

In the end, I was a little bored today, so I thought I’d give it a shot. I made my picks, now I’ll just sit back and see where things go.

Click below to get started today.