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InTrade expired us.gdp.2007Q4.negative at 0, but US Q407 GDP was negative.
I purchased the US.GDP.2007Q4.NEGATIVE contract, which the exchange expired at 0 on Jan 31 15:49 after the BEA's "Advance" release. However, Reuters reports (http://www.reuters.com/article/compan...) that US final Q407 GDP was negative after BEA revisions (http://www.bea.gov/national/xls/gdpch...). I wrote to InTrade in February asking why the contract was expired at 0 after the "Advance" release and never received a response. I feel that the exchange violated its contract rules (which specifically tie the contract to the final number), and am disappointed and frustrated. How do I seek compensation?
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Inappropriate?Thanks for your enquiry. This contract was expired correctly in line with our contract rules.
Our contract rules state that the final GDP figures will be used for expiry, and not the advance or preliminary numbers. The final figures for Q4 2007 were released on March 27th of this year, as detailed on the BEA release schedule:
http://www.bea.gov/newsreleases/news_...
The figures released on this day detailed a 0.6% increase in GDP and so the US.GDP.2007Q4.NEGATIVE contract was expired at 0. Table 1.1.1. Percent Change From Preceding Period in Real Gross Domestic Product, which is used as the official source of expiry information showed a 0.6% increase after this release. The full release can be viewed here:
http://www.bea.gov/newsreleases/natio...
It clearly states that "Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 0.6 percent in the fourth quarter of 2007, according to final estimates released by the Bureau of Economic Analysis.".
The final figures have since been revised further and Table 1.1.1. updated to show a GDP figure of -0.2%. However, the contract was expired based on the final GDP figures provided by the BEA at the time - in line with the contract rules. Advance or preliminary figures were not used for expiry.
Because the final figure as published by the BEA was used for expiry, as per the contract rules, the original contract expiry will not be adjusted.
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