The lingo of prediction markets varies widely.
The same “thing” might be called an information market, idea future, virtual stock market, financial market, securities market, event market, binary option, betting exchange, bookmaker, market in uncertainty, or gambling/wagering. Only recently has the name prediction market emerged with some sort of consensus.
To place a prediction in the market, you might do any of the following:
[bid/buy/bet on/back] the “yes” [security/contract/coupon/future/outcome] at [price/probability/fractional odds/decimal odds/moneyline] X
Predicting something won’t happen gets even uglier. You might:
[ask/short sell yes/buy no/buy bundle & sell yes/bet against/lay] at [price/probability/fractional odds/decimal odds/moneyline] X
For example, InklingMarkets uses the “short sell yes” variation:
So what is the clearest language for prediction markets?
A good guiding principle in this regard is KISS: Keep It Simple Stupid. Or, in more grandiose terms, Occam’s razor. All else being equal, one should choose the simplest and most straightforward option.
By this measure, it seems that betting lingo wins hands down. It’s vastly simpler to say “I bet $10 that Obama will lose” than to say “I short sell three shares of Obama at price 67”. The former is more direct and intuitive. Almost everyone understands what it means to place a bet, including subtleties like risk, uncertainty, and competition. On the other hand, even avid stock traders get tripped up by the concept of selling short.
Every prediction can be stated as: “I bet that outcome O will/won’t happen; I’ll risk $X to win $Y”. Betting for things and against things is symmetric. There is no need to short sell, buy bundles first, etc.
Yet most prediction markets don’t KISS, going with financial terminology instead, reflected even in the name itself. Why? I believe it’s because of the legal and social stigma attached to gambling. It’s a shame that such considerations force vendors to make the technology harder to understand and more complicated to use.