Hollywood Stock Exchange
From Wikipedia, the free encyclopedia
The Hollywood Stock Exchange, or HSX, is a web-based, multiplayer game in which players use simulated money to buy and sell "shares" of actors, directors, upcoming films, and film-related options.
Because trading directly affects the prices of the securities — purchasing enough shares of a stock causes its price to rise, and selling causes its price to fall — and because the ultimate value of a moviestock is based on the film's box office, stock prices act as box office predictions. For example, if a particular moviestock trades at "H$40.00", the market is predicting that the movie will gross US$40 million at the box office in the first four weekends of wide release. In 2002, players in the Hollywood Stock Exchange correctly predicted 35 of the 40 major-category Oscar nominees. It is considered a good example of a prediction market.
Previous incarnations of the game included a music market (for purchasing musical artists), prizes for top gainers, and, briefly, a "buyout" program in which HSX would reward top players by purchasing their portfolios at a price of US$1.00 per HS1 million if the player would list the portfolio for sale on eBay. These features have been discontinued.
HSX attracted some private investment during the dot-com boom and ran TV ads on cable channels in an effort to attract viewers. After the dot-com crash, HSX was eventually acquired by units of Cantor Fitzgerald. Cantor has used HSX's moviestock prices to assist Cantor's gambling operations in the United Kingdom, in which bettors can place bets on how much money US films will gross. HSX is headquartered in Century City, California.
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[edit] StarBonds
StarBonds represent the "trailing average gross" of an actor or director's last five movies. As with the MovieStocks, trading directly affects the value of these bonds, until they adjust after a new release. StarBonds can be volatile, as an actor or director may star in 5 blockbuster movies, only to then star in a small independent film, causing their StarBond to fall rapidly.
[edit] How Options Work
A movie option can either be a "Call" or a "Put." A call is claiming that the movie will make more than a certain amount for its opening week, and a put is claiming that it will make less than that amount. For example, suppose there is a $10M call and put for the opening weekend total of a movie called Rosebud. If Rosebud makes $20 million in its opening weekend, those who called Rosebud at $10 million will receive $10 for each share of the Rosebud call that they purchased, and those with a put would lose the money they invested. If it made $5 million, those with the Put would receive $5 a share and those with a call would earn nothing. As of June 2006, Options have been renamed as Derivatives.
[edit] Special Warrants
During the holidays, there are "holiday warrants" that allow one to predict the final gross of a movie by President's Day Weekend of the following year. For example, there was a Narnia warrant of $180 million. Since Narnia could make $300 million by 2/20/06, anyone who purchased the warrant would be looking at $120 per share. On the other hand, Zathura had a holiday warrant for $70 million. Since it closed a month after its release making less than $30 million during its run, anyone who predicted it as making more than $70 million would lose their investment. During the summer, there are similar "blockbuster warrants" that allow one to predict the final gross of a movie by Labor Day Weekend of that year.
HSX also releases various special derivatives throughout the year. During the summer of 2006, there were derivatives for the World Cup Tournament.
[edit] External links
- Hollywood Stock Exchange
- HSX Research
- Project Genome - Detailed research about most HSX stocks
- The Ampersand - Strategy guide developed by HSB&R, a HSX fansite
- International Herald Tribune article 27 Nov 2005 - Hollywood 'stock market' helps guide real investors.
- Swelltown.com - Similar site but focuses more on gossip and headlines.
