Detecting Important Events
using Prediction Markets, Text
Mining, and Volatility Modeling
George Tziralis Panos Ipeirotis

markets and efficiency
• strong: prices reflect all information, public and
private
• semi-strong: prices reflect all publicly available
information
• weak: past prices cannot be used for market
prediction

prediction markets?
• Perhaps, the relationship between price and
information is no more clear than in prediction
markets (Pennock et al. 2002)
• let’s start from the weak form of efficiency
• is it possible to predict future prices using only
past ones?

playground
• InTrade
• political contracts
• US nominee elections 08
• 800 - 1000 time series instances for each
contract