the Mark98 claim

Jay : Markybot : Mark98
The Mark98 FX claim pays off depending on Markybot's score after a year of operation. Well, technically it pays off depending on player 14's score, but player 14, registered to me, is currently traded by the robot Markybot, and I intend to keep it that way for at least the life of the claim.

This table shows how the claim's payoff depends on the score.

scorepayoff scorepayoff scorepayoff scorepayoff scorepayoff
0.7500 0.85020 0.95040 1.05060 1.15080
0.7551 0.85521 0.95541 1.05561 1.15581
0.7602 0.86022 0.96042 1.06062 1.16082
0.7653 0.86523 0.96543 1.06563 1.16583
0.7704 0.87024 0.97044 1.07064 1.17084
0.7755 0.87525 0.97545 1.07565 1.17585
0.7806 0.88026 0.98046 1.08066 1.18086
0.7857 0.88527 0.98547 1.08567 1.18587
0.7908 0.89028 0.99048 1.09068 1.19088
0.7959 0.89529 0.99549 1.09569 1.19589
0.80010 0.90030 1.00050 1.10070 1.20090
0.80511 0.90531 1.00551 1.10571 1.20591
0.81012 0.91032 1.01052 1.11072 1.21092
0.81513 0.91533 1.01553 1.11573 1.21593
0.82014 0.92034 1.02054 1.12074 1.22094
0.82515 0.92535 1.02555 1.12575 1.22595
0.83016 0.93036 1.03056 1.13076 1.23096
0.83517 0.93537 1.03557 1.13577 1.23597
0.84018 0.94038 1.04058 1.14078 1.24098
0.84519 0.94539 1.04559 1.14579 1.24599
1.250100

it's hard to predict

I think the claim is interesting because it's hard to predict Markybot's score. If the bot loses money, I will get annoyed and work to improve its algorithms, possibly breaking a downtrend. If it earns money, other players may take note and try to copy its strategy, possibly breaking an uptrend. Nothing can be counted on for sure.

Over its first four weeks, Markybot's score varied between about 0.970 and 1.045, a payoff difference of 15. Broad score trends are fairly slow. But note that a drop from 1.030 to 0.980 happened in one day, so occasional sudden changes are possible. I think the claim should be interesting both to fundamentals players, who think they can predict the outcome, and to traders who try to take advantage of volatility.

manipulation

It will be possible for fanatical Mark98 holders to manipulate Markybot's score near the judgment time by pushing around the prices of claims Markybot holds positions in. Because Markybot holds an extremely diverse portfolio and avoids taking large positions in thinly-traded claims, it should be expensive to manipulate its score by much. I expect that manipulation is unlikely to be profitable. Nevertheless, the claim does allow it, and you should be aware of the possibility.

Markybot itself will not trade in this claim, at least not unless it suffers a bug, its account is broken into, or something equally dire occurs. If it does buy the claim by mistake, I intend to intervene by hand, as explained below, to sell the coupons, as quickly as I can after I've fixed the bug. Note that the claim definition does not require this.

human intervention

Currently, Markybot makes all its own buy and sell decisions, and I haven't intervened. Even when it bought TWAC due to a bug in the judgment date checking, I did not step in to sell the coupons it bought by mistake. I even let it buy more, although I expect it to lose its money.

However, the Mark98 claim does not require that Markybot make all its own decisions. The claim is about the score of Markybot's account, not the score that Markybot earns algorithmically. And of course I wrote the program, so in a sense Markybot doesn't make its "own" decisions anyway; it makes the decisions I designed it to make. One of the ideas I want to try out in the future is giving Markybot hints about how I expect claims to be judged. I might tell it, for example, that I'm 90% sure that MLAW will be judged 0, and let it trade accordingly. I may make other interventions as well, though I don't currently plan to.

updated 20 June 2000