Tactics

Locker Room Tactics
What is the index ?

Action Market offers a live simulation of markets so that gamers can trade futures and options in an adrenalin-packed sporting environment.

We have created gaming indices based on the evolution of the score of a live event. Using the example of a Rugby match, the focal point is the Action Market Future Index.

Action Market Spot Index (SPOT):
"current score of Team A" – "current score of Team B" + 100. 

Action Market Future Index (FUTURE):
market expectation of the SPOT at the final whistle. 

 

During the game, Action Market Future Index is presented with Bids (the prices at which gamers are ready to buy) and Offers (the prices at which gamers are ready to sell).

Those Bids and Offers are created when gamers enter orders onto Action Market.

The highest Bid and the lowest Offer represent the best price and therefore where to buy and sell the Action Market Future Index. It shows as 110 / 112 as an example.

At the end of the game, the Action Market Future Index will converge with the Action Market Spot Index.

 

Action Market indices are only influenced by observable events and gamers anticipations during the live event.

If Team A wins by 10 points difference, then Action Market Future ends at 110.

If Team B wins by 5 points difference, then Action Market Future ends at 95.

Each sport event has specific index to best enhance the gamer experience.

What are Futures and Options ?

Futures and Options are tools traditionally used when trading Financial Assets.

Here at Action Market, a gamer’s focal point of interest is the Action Market Future Index. The aim is to trade Futures contracts with other gamers and Options contracts provided by Action Market’s Option Wizard.

Both types of trades are valued against the final score at the end of the match.

A Futures contract represents the purchase or sale of the Action Market Future Index at a specified price.

When a gamer anticipates the final Action Market Spot Index to be higher than the Action Market Future Index, he will purchase Futures contracts to represent his view. The gamer will observe the market and enter an order to buy at a specified price. At times, he may buy cheaper because Action Market has found a seller willing to sell below his price.

When a gamer anticipates the final Action Market Spot Index to be lower than the Action Market Future Index, he will sell Futures contracts to represent his view. The gamer will observe the market and enter an order to sell at a specified price. At times, he may sell higher because Action Market has found a buyer willing to buy above his price.

Options contract gives the buyer the right but not the obligation to buy or sell the Action Market Future Index at a specific price at the final whistle. A gamer needs to pay a premium to obtain that right (buy). Alternatively, a gamer will receive the Premium if he sells that right to Action Market Option Wizard.

There are two types of Option contracts:

  1. The CALL is the right to BUY the Action Market Future Index. In other words, a gamer will buy a CALL when he anticipates that the final Action Market Spot Index will be higher than the specified price (or STRIKE) plus the premium;
  2. The PUT is the right to SELL the Action Market Future Index. In other words, a gamer will buy a PUT when he anticipates that the final Action Market Spot Index will be lower than the specified price (or STRIKE) minus the premium.
How to win Treasury Points with Futures ?

A gamer can use Action Market Futures to play the final score:

  • If you buy 10 Future contracts at 102 and the final Action Market Spot Index ends at 110 (Team A wins by 10 points), you will win 10 x (110 -102) or 80 Treasury Points..
  • If you buy 10 Future contracts at 102 and the final Action Market Spot Index ends at 95 (Team B wins by 5 points), you will lose 10 x (95 -102) or -70 Treasury Points.

However, he can also win points during action phases throughout the game:

  • The Action Market Future Index is showing 102-103
  • The gamer expects Team A to score soon due to his anticipation of the action on the pitch
  • He buys 50 Action Market Futures at 103 
  • Team A scores a try and converts it. The market reacts and the Action Market Future Index moves up to 110-112
  • The gamer sells back his 50 Action Market Futures at 112
  • His total increases by 450 Treasury Points - (112-103) x 50

The yellow line on the graph represents the last order transacted, giving an indication of market trends.

How to win Treasury Points with Options ?

Four key elements:

  1. The price of Action Market Options varies during the match, mainly depending on the value of the Action Market Future Index and the time remaining until the final whistle.
  2. When a gamer buys an Action Market Option, his maximum loss is the premium he paid for the option.
  3. When a gamer sells an Action Market Option, his loss is not capped but his reward his capped at the premium he received.
  4. Action Market Options are exercised automatically. Action Market determines if a gamer’s Option needs to be exercised in order to generate Treasury Points or not and revalued constantly during the game.

A gamer can use Action Market Options to play the final score:

A gamer is looking for a win for Team A and wants to limit his potential loss.

He requests a price for a CALL 105. The Options Wizard provides a price of 3.0 points with 35 minutes remaining.

The gamer buys 50 CALLs 105 for 3.0 and hence spends 150 Treasury Points in premium.

  • If the final Action Market Spot Index settles at 115, the gamer can exercise his right to buy Action Market Future at 105. His win on the trade will be his win on the Action Market Future of 500 Treasury Points (50x (115-105)) minus the premium spent of 150 Treasury Points. In total he will have added 350 Treasury Points to his total.
  • If the final Action Market Spot Index settles at 95, the gamer does not exercise his right to buy Action Market Futures at 105 - if he did he would generate a loss. His loss is limited to the premium of 150 Treasury Points.

A gamer can also use Options to benefit from short term moves or anticipation of moves with limited downside:

  • The Action Market Future Index is quoting 105 /106.
  • A gamer expects Team B to score and hence Action Market Future Index to decrease.
  • He requests a quote for a PUT 98. The Options Wizard provides a price of 2.0 points.
  • The gamer buys 100 PUT 98 for a premium of 200 Treasury Points (100 x 2).
  • Team B scores two tries in a short period of time thanks to superb play. The Action Market Future Index reacts and is now at 89/90.
  • The gamer requests a quote for the PUT 98 with the view to sell it. The Options Wizard provides a price of 10.
  • The gamer sells his 100 PUT 98 at 10 and receives a premium of 1,000 Treasury Points (100 x 10).
  • The gamer’s total increased by 800 Treasury Points for a maximum risk of 200 Treasury Points.

A gamer can also sell Options if he anticipates no important changes in the score

  • The Action Market Future Index is quoting 105 /106.
  • A gamer expects no change in the score and hence Action Market Future Index to be stable around that level.
  • He requests a quote for a CALL 115. The Options Wizard provides a price of 2.0 points.
  • The gamer sells 100 CALL 115 for a premium of 200 Treasury Points (100 x 2).
  • If the final Action Market Spot Index settles at 105, the CALL 115 value is zero (no one will exercise his right to buy the Action Market Future at 115 when it is at 105 and generate a loss (105-115)).
  • The gamer pockets the initial premium as his prediction was correct.
Combining Futures & Options !

A gamer can use Options to mitigate his risk when playing.
However, there are countless possibilities and strategies to increase his
Treasury Points whilst managing his downside risk.

As an example:

  • A gamer supports Team A and hence has bought 10 Action Market Futures at 105 twenty minutes ago.
  • Case 1: the gamer does nothing:
    • If the final Action Market Spot Index settles at 82, the gamer will have lost 230 Treasury Points (82-105 x 10) with his Action Market Futures
  • Case 2: the gamer is actively following and playing Action Market:
    • Team B has scored a try and is looking very strong. Action Market Future is now quoting 95-97.
    • The gamer wants to limit his losses and requests a quote for a PUT 93. The Option Wizard quotes 2 / 3.
    • The gamer buys 10 PUT 93 for 30 Treasury Points.
    • If the final Action Market Spot Index ends at 82, the gamer will have:
      • lost 230 Treasury Points (82-105 x 10) with his Action Market Futures
      • won 110 Treasury Points (93-82 x 10) with his Action Market Options
      • paid 30 Treasury Points for Premium
      • resulting in an overall loss of 160 Treasury Points, a saving of 70 Treasury Points compared to Case 1
Understanding Trading Limits

Every single gamer is granted limits to be respected during the game.

A - Treasury

The Treasury is made of an initial donation of 1,000 points plus the constant valuation of your Action Market Futures and Action Market Options during the game and any additional Treasury Points purchased.

If a gamer’s Treasury falls below zero, he will be obliged to purchase additional Treasury Points to continue gaming.

B - Position Limit in Action Market Futures 

A gamer is granted a maximum position of Action Market Futures of +250 units (buying) or -250 units (selling). The position is the algebraic sum of all the positions held by that gamer.

By buying or selling Action Market Futures, a gamer can control his position in Action Market Futures at any point.

C - Position Limit in Action Market Options

A gamer is granted a maximum position of Action Market Options of +1,000 or -1,000 units.

The position is the sum of all units traded minus the unit closed out during the game. To continue to trade option whilst having close to his limit, the gamer can close out existing option positions.

How does Action Market Rankings work ?

Performance Ranking: a gamer is ranked according to the sum of Treasury Points gained or lost with Action Market Futures and Options divided by the Treasury Points initially given plus any additional points purchased. A gamer will also receive a Performance Career Ranking based on the last 10 games played.

Outright Ranking: a gamer is ranked according to the sum of Treasury Points gained or lost with his Action Market Futures and Options during the match. A gamer will also receive an Outright Career Ranking based on the last 10 games played.