Explanation: The above table lists the details of a typical contract for a future event (in the year 2007 the 2008 presidential election) that is traded on our exchange. It is set-up as a true/false (yes/no) proposition - if the contract proposition ends up being a true statement then the contract expires with a value of 10.0 points, if it ends up being false then the contract value is 0.0 points at expiration. The value the contract trades at until its last-trade-date indicates what the trading public believes at that particular point in time are the chances of the proposition coming true in the future (e.g., a contract trading 1.9 points means traders think there is 19% chance of the contract proposition becoming true at expiration).

Buy-Long Scenario: If you believe ex-NYC Mayor Rudy will win the election then you would buy this contract anticipating it would go higher and/or expire at 10.0 points giving you a profit (10.0 minus the amount you bought it for). If the ex-mayor loses the election then the contract would expire with a value of 0.0 points causing you to incur a loss (the amount you bought it for). You can sell the contract(s) you bought before trading ends for a profit or a loss depending upon how many points you bought the contract for and how many points you get when you sell it.

Sell-Short Scenario: If you believe ex-NYC Mayor Rudy will lose this election then you would sell the contract anticipating it would go lower and/or expire at 0.0 points giving you a profit (the amount you sold it for). If the ex-mayor wins the election then the contract would expire with a value of 10.0 points causing you to incur a loss (10.0 minus the amount you sold it for). You can buy back the contract(s) you sold before trading ends for a profit or a loss depending upon how much you received when you sold it short and the points you pay for the contract when you buy-to-cover it.