I’d like to touch a little on what I find to be an essential feature of the almanis forecast market but which I fear is sometimes underutilised – that’s the “close out” function. You can find the close out button to the right of the questions appearing in the “My Activity” section of the site.
The function is there to allow you to liquidise your position on a question so that you receive whatever points you’re owed and be left with no further exposure. If the market has moved further in the direction of your forecast(s) since you made them, you will receive more points than you originally invested. If things have moved against you, you’ll receive fewer.
You can see your “Close Out Value” (the number of points you receive when you close out) and your “Points Spent” next to the close out button. The difference between the two will tell you if you’re running at a profit of loss.
The first and most obvious thing to say about this is that it allows you to make forecasts on questions that won’t settle for month or years without having to wait until that settlement event in order to see a return on your investment. If, say, you move a market from a 50% likelihood to 45% and a few weeks later that market is sitting at 5%, you can take an immediate profit. You don’t have to wait until the question settles or take the risk that the event in question does actually end up happening.
You may find, as I do sometimes, that there’s a question which is begging to be moved but that all your points are already invested in other questions and you don’t have the points available to act on your hunch. This is where the close out function comes into its own. The thing to do here is go into your My Activity page and find the question which is least likely, in your opinion, to move further in your favour and close it out. Use the points you free up to invest in a question in which you see more potential value.
The simple rules of compound interest suggest that, given a similar rate of forecast accuracy, you’ll make more points and climb the forecasting leaderboard more quickly if you make lots of small forecasts, closing out and re-investing frequently, than you will by storing all your points into a few of your favourite questions and waiting to see if events prove you right.