The markets below are so-called "double auction" markets. As market managers, we define and list "contracts" which have a value to be determined by some future event. For example, we might open an "Avian Influenza Market" and list a contract in it which will have a value of $1.00 if the first case of a human H5N1 infection in the U.S. occurs by January 1, 2010, and $0.00 if that event does not occur. Participating "traders" make offers to buy and sell those contracts at prices of their choosing, prices which accord with their beliefs about the likely outcomes of that event. When a buyer's price matches or exceeds the price offered by a seller, a trade happens. These trading prices can properly be interpreted by the traders and visitors alike as the "markets" prediction of the likelihood of occurrence of the event in question.
Double Auction Markets