2000 US Senate Election in New York
At 5:00PM, C.S.T. Monday, June 14, 1999 the Iowa Electronic Market (IEM) will open trading in a market based on the 2000 US Senate election in New York. This document describes that market and should be viewed as a supplement to the Trader's Manual. Except as specified in this prospectus, trading rules f or this market are the same as those specified in the Trader's Manual for the Iowa Electronic Market.
Contract liquidation values in this election market will be determined by the outcome of the 2000 US Senate election in New York. There are 5contracts in this market representing 5 possible unique outcomes. The liquidation value of the contract which represents the actual outcome of the 2000 US Senate Election in New York will be $1.00. All other contracts will have a value of $0.00.
CONTRACTSThe financial contracts initially traded in this market are:
Code Contract Description GIULIANI $1.00 if Republican Rudolph W. Giuliani is elected; $0.00 otherwise CLINTON $1.00 if Democrat Hillary Clinton is elected; $0.00 otherwise NYRep $1.00 if another Republican is elected; $0.00 otherwise NYDem $1.00 if another Democrat is elected; $0.00 otherwise NYInd $1.00 if neither a Democrat nor a Republican is elected; $0.00 otherwise
As the contest for the US Senate unfolds, new candidate-specific contracts may be introduced as spinoffs of the NYRep, NYDem or NYInd contracts as described below. However, once a contract is listed it will remain active until after the convention when all contracts in the market are liquidated.
DETERMINATION OF LIQUIDATION VALUESThis is a Winner-Takes-All market. The contract that denotes the actual outcome of the 2000 US Senate Election in New York will have a liquidation value of $1.00, all others will have values of $0.00.
The contract GUILIANI will be liquidated for $1.00 after the November 2000 election if Mayor Guiliani is elected as the US Senator from NY. If he is not elected as Senator, the liquidation value of the GUILIANI contract will be $0.00. Similarly the contract CLINTON will be liquidated for $1.00 or $0.00 depending upon whether or not Hillary Clinton wins the election. The contract NYRep will have a liquidation value of $1 if some candidate from the Republican party who is not separately listed in this market is the election winner; its liquidation value will be $0.00 if a listed Republican wins or if no Republican wins. NYDem will have a liquidation value of $1.00 if a nonlisted member of the Democratic party wins the election and $0.00 otherwise. And NYInd will have a liquidation value of $1.00 if the winner of the Senate election in NY is not separately listed in this market and is not a member of either the Democrat or Republican parties; its liquidation value will be $0.00 otherwise.
The New York Times will be the official source for election results
Liquidation formulas can be viewed while you are logged into the IEM trading system by clicking on the market name, NYSENATE,at the upper righthand corner of the market window.
The judgment of the IEM Governors and Directors will be final in resolving questions of typographical or clerical errors.
CONTRACT SPIN-OFFSThe Directors of the IEM reserve the right to introduce new contracts to the market as spin-offs of existing contracts. When a contract spin-off occurs, an original contract will be replaced by two or more new contracts which subdivide the payoff space of the original contract. No holder of the pre-spinoff contracts will be adversely affected. Traders will receive the same number of each of the new contracts as they held in the original, and the sum of the liquidation values of the new contracts will equal the liquidation value of the original.
Only the contracts NYRep, NYDem, NYInd, can be spun off.
> Decisions to spin-off a contract will be announced at least two days in advance of the spin-off. The new contract names, the specifications regarding liquidation values and the timing of the spin-off will be included in the announcement. This announcement will appear as an Announcement on your WebEx login screen.
MARKET CLOSINGThis market will close at 12:00PM, C.S.T. Monday, November 8, 2000. At that time, or as soon thereafter as results are available, liquidation values will be declared and funds credited to the cash accounts of market participants.
CONTRACT BUNDLESBundles consisting of one share of each of the contracts in this market can be purchased from or sold to the IEM system at any time. The price of each bundle is $1.00. Because exactly one of the outcomes denoted by the contracts in this market will result from the election, the total payoff from holding a bundle consisting of one of each contract until the market closes is $1.00.
To buy or sell bundles from the IEM exchange, use the "Market Orders" option from the Trading Console.
MARKET ACCESSAll current and newly enrolled IEM traders with US dollar denominated accounts will automatically be given access rights to the 2000 US Senate Election in New York Market. Access to this market is achieved by logging into the IEM and choosing NYSENATE from the Navigation Bar.
Funds in a trader's cash account are fungible across all markets so new investment deposits are not required. Additional investments up to the maximum of $500 can be made at any time. Requests to withdraw funds may be submitted at any time by sending email to the IEM Office (email@example.com).