That is a great aspect of the HSX markets; the MovieStocks are very easy for people to understand, but you also have StarBonds and these options (and more) for more sophisticated traders.

The constant “churn” of contracts is key in maintaining interest on an exchange.

That’s correct Jed. By nature of the production process and the constant flow of new product being introduced, there are inherently always available long-term and short-term contracts. We augment this by adding call and put options relating specifically to a film’s opening weekend. For example a call option speculates a film will have a higher box office result for its opening weekend than the option’s strike price. A H$20 call has a strike price of H$20, and will delist at zero if the movie does not make $20 million or more during its opening weekend (typically that is Fri-Su). If the film makes more than $20 million it will cash out based on actual box office receipts minus the strike price; so say, for example a film made $25 million during the Fri-Su release weekend, the call would cash out at H$5.00 (H$25 – H$20). We also add other ‘special securities’ tied to season or other shorter-term industry events to further trader involvement in the Exchange. This combination of long-term and short-term propositions provides variety in game-play and further peaks trader interest in the nuances of a film’s lifecycle. The same design method can be applied to prediction markets in other industries.