north korean contract
james
The geo-political context changes if the DOD explicitly declares that the missiles exited NK airspace. If the DOD leaves it ambiguous it gives all parties room for negotiations. Clearly, this causes problems for TS and its traders.
I would argue that the spirit of the contract is "if NK has the nerve to fire its missiles in a way that demonstrates clear aggression towards its neighbors or not." The airspace becomes the measure, and the perception is left to DOD.
In this case, from the DOD’s perspective, NK did not fire its missile in a way that was clearly aggressive towards its neighbors and therefore the contract should be set to 0. (This is supported by the fact that the contract was only at 33.5.)
How else could an exchange measure something that relates to a perception? Can a contract be based on a perception? In the end how do you decide to pay or not?
Maybe TS has to more clearly describe the sprite of the contract in terms of the quantitative AND qualitative outcomes. And such contracts are decided by an independent arbiter. But this creates other problems...
Thoughts?
-JMc
sftweeindieguy
notion of perception of aggressiveness is highly subjective anyway. By
that standard, several of North Korea's neighbors perceived aggression
when the test missiles were placed on their launch pads.
The spirit of the contract was simple: would North Korea test any
missiles? The contract rules slightly blur the issue by inserting the
standard of leaving NK air space and then completely muddle it by
making some phantom explicit DOD announcement the arbiter of the
contract.
The spirit of the contract was met: North Korea launched seven missiles
and they all left North Korean air space and territorial waters. The
National Security spokesman of the President and Commander-in-Chief has
stated that the missiles went about 275 miles and a public DOD inquiry
site has stood by that statement. So Tradesports is now failing to
live up to both the spirit and the letter of the contract. The current
price of the contract there does not reflect ambiguity about whether
the event occurred but rather fear that Tradesports will continue to
screw it up.
ahawkman
contract appears to have been met, they would face complaints from all
those who sold (bet against) it happening. Fact is, the specifics of
the contract (DoD verification) have not been met yet. I agree it's a
very "tough beat" if you have that contract.
sftweeindieguy
ahawkman wrote:
> Fact is, the specifics of
> the contract (DoD verification) have not been met yet. I agree it's a
> very "tough beat" if you have that contract.
It's debatable at best whether the specifics of the contract have been
met. The administration, of which the DOD is a subsidiary part, had
spoken on the issue and confirmed the terms of the contract. The DOD
has since aligned itself with those remarks. And since then a top DOD
spokesman has confirmed them specifically in private emails to a TS
member. Who knows how TS itself is trying to confirm what happened, if
it even is. The problem is, TS has shown difficulty with some simple
language for whatever reason, and doesn't seem to (or pretends not)
understand what information has been released.
Furthermore, TS is also undone by the very language of its contract
rules. If you read the contract in question, TS is obliged to prove
that all the missiles launched were confined to North Korean air space
to expire the contract at 0. But again TS either doesn't understand
this or is ignoring it. They want to pretend that they wrote a
well-constructed binary contract. No one else needs to.