Creating a Market on Ballast

Designing Tradeable Prediction Markets

Ballast Markets allows community members to propose new prediction markets on ports, chokepoints, tariffs, and global trade signals. Well-designed markets attract liquidity, generate price discovery, and create value for traders analyzing supply chains.

This module teaches you how to design, propose, and launch successful prediction markets on the Ballast platform.

What Makes a Good Market?

1. Objective Resolution Criteria

Good: "Will Port of Los Angeles exceed 900,000 TEUs in December 2024, per official LA Port monthly statistics?"

Bad: "Will LA Port have a good month in Q4 2024?"

Key Principle: Anyone with access to the data source should reach the same resolution outcome. No judgment calls.

2. Verifiable Public Data Source

Acceptable Sources:

Unacceptable Sources:

Check Data Availability:

Before proposing a market, verify:

  1. Historical data exists (check past 12-24 months)
  2. Data publishes consistently (monthly, not sporadic)
  3. Data is free and accessible (no login required)

3. Trading Interest

Ask: Why would traders care about this market?

High Trading Interest:

Low Trading Interest:

Validate Interest: Check if analysts, journalists, or traders discuss this topic on X (formerly Twitter), LinkedIn, trade publications.

4. Reasonable Time Horizon

Optimal Time Horizons:

Avoid:

5. Clear Market Structure

Choose market type based on question:

Binary (YES/NO): "Will X exceed Y?"

Scalar (Range buckets): "What range will X fall into?"

Index (Composite): "What will combined index value be?"

Step-by-Step: Proposing a Market

Step 1: Identify a Tradeable Question

Brainstorm Approach:

A. Follow Trade News

B. Analyze Data Gaps

C. Trader Needs

Example Question Development:

Initial Idea: "Will Charleston port be busy in Q1 2025?"

Refined Question: "Will Port of Charleston exceed 250,000 TEUs in January 2025?"

Step 2: Define Resolution Criteria

Template:

Market Question: [Clear yes/no or range question]

Resolution Criteria:
- Metric: [Exact metric name, e.g., "Monthly TEU throughput"]
- Threshold or Range: [Specific number(s)]
- Data Source: [Official source URL]
- Publication Timing: [When data typically published]
- Resolution Date: [Market resolves on first of month after expiry]
- Fallback Rule: [What happens if data is delayed or unavailable]

Example:

Market Question: "Will Suez Canal monthly transits exceed 1,800 vessels in February 2025?"

Resolution Criteria:

Step 3: Choose Market Type and Parameters

For Binary Markets:

Parameters to Specify:

  1. Threshold: Must be meaningful (not arbitrary). Use historical data to set thresholds near 40-60th percentile (ensures competitive odds).
  2. Expiry: 1st of month following target period (e.g., January 1, 2025 for December 2024 market)

Example Binary Parameters:

For Scalar Markets:

Parameters to Specify:

  1. Bucket Ranges: 3-5 buckets covering reasonable outcome range
  2. Bucket Widths: Should reflect forecast uncertainty (±10-15% of historical average)

Example Scalar Parameters:

For Index Markets:

Parameters to Specify:

  1. Components: 3-5 ports/chokepoints/metrics
  2. Weights: Percentage allocation (must sum to 100%)
  3. Normalization Method: How to scale components (e.g., trailing 12-month average = 100)

Example Index Parameters:

Step 4: Write Market Proposal

Proposal Format (submit via Ballast platform):

Title: [Market question in 10-15 words]

Market Type: [Binary / Scalar / Index]

Category: [Ports / Chokepoints / Tariffs / Freight Rates]

Expiry Date: [YYYY-MM-DD]

Resolution Criteria:
[Detailed criteria from Step 2]

Parameters:
[Threshold/buckets/index components from Step 3]

Rationale:
[2-3 paragraphs explaining why this market is tradeable, who would trade it, and what edge traders could have]

Data Source Verification:
[Link to historical data, prove data is available and updated regularly]

Related Markets:
[Optional: Link to existing markets this complements]

Example Proposal:

Title: "Will Port of Charleston exceed 250,000 TEUs in March 2025?"

Market Type: Binary

Category: Ports

Expiry Date: 2025-04-01

Resolution Criteria: Resolves YES if Port of Charleston handles 250,001 or more TEUs in March 2025, per official South Carolina Ports Authority monthly statistics. Resolves NO if 250,000 or fewer TEUs. Resolution occurs when March 2025 data is published (typically April 15-20). If data is not published by May 1, 2025, market resolves using most recent available month.

Rationale: Charleston is the 6th busiest U.S. container port and a key East Coast gateway. March historically sees post-Lunar New Year surge from Asian imports. 250k TEU threshold is 6% above 2024 March volume (236k), reflecting growth expectations. Traders can forecast using February arrivals data (leading indicator) and compare to peer ports (Savannah, Norfolk). Market appeals to importers hedging East Coast capacity and freight forwarders routing cargo.

Data Source Verification: SC Ports Authority publishes monthly TEU statistics: sc-ports.com/about/news-and-information/monthly-reports Historical data available back to 2010, published consistently 15-20 days after month end.

Related Markets:

Step 5: Submit and Await Review

Ballast Review Process (7-14 days):

  1. Clarity Check: Is question unambiguous?
  2. Data Verification: Is source reliable and accessible?
  3. Tradability Assessment: Will traders engage with this market?
  4. Risk Review: Any regulatory or compliance issues?

Approval Outcomes:

Approved: Market goes live, you're credited as creator, eligible for creator rewards if market generates volume Approved with Edits: Ballast suggests refinements (e.g., adjust threshold, clarify resolution) Deferred: Market concept is good but timing is off (e.g., data source not updating regularly yet) Rejected: Insufficient trading interest, unclear resolution, or data unavailable

After Approval:

Common Proposal Mistakes

Mistake 1: Ambiguous Resolution Criteria

Bad Example: "Will Panama Canal face significant drought in Q2 2025?"

Issues:

Fix: "Will Panama Canal daily transit limit be restricted to fewer than 32 vessels per day for over 30 days in Q2 2025, per Panama Canal Authority official notices?"

Mistake 2: Paywalled or Inaccessible Data

Bad Example: "Will VLCC freight rates exceed $40/ton in March 2025 per Clarksons Platou?"

Issues:

Fix: "Will Shanghai-Rotterdam container freight rate exceed $1,500/FEU in March 2025, per Shanghai Containerized Freight Index (free public data)?"

Mistake 3: Overconfident Threshold Selection

Bad Example: "Will LA Port exceed 1.2M TEUs in January 2025?" (historical Jan average is 850k)

Issues:

Fix: "Will LA Port exceed 880k TEUs in January 2025?" (3.5% above average, competitive odds)

Mistake 4: Too-Distant Expiry

Bad Example: "Will Port of Houston exceed 300k TEUs in December 2026?" (18 months away)

Issues:

Fix: "Will Port of Houston exceed 280k TEUs in June 2025?" (5 months away)

Promoting Your Market

Once approved, drive trading volume:

  1. Share on Social Media: Tag logistics/supply chain accounts, use #PredictionMarkets hashtag
  2. Post in Trade Communities: FreightWaves forums, LinkedIn groups, Reddit r/supplychain
  3. Explain Your Thesis: Write brief post on why you think market is mispriced (attracts contrarian traders)
  4. Engage with Questions: Respond to traders asking about resolution criteria or data sources

Example Promotion Post:

"New market on Ballast: Will Port of Charleston exceed 250k TEUs in March 2025? I'm bullish—Feb arrivals are up 12% YoY and Lunar New Year cargo is arriving late this year. Market is pricing 58% probability but I think it's 70%+. Trade here: [link]"

Frequently Asked Questions

(Already included in frontmatter above)

Ready to Propose Your Market?

Turn your insights into tradeable markets.

Submit Market Proposal on Ballast →

Design prediction markets that traders want to engage with. Earn creator rewards if your market generates volume.

Next Steps

Continue Learning:

Study Existing Markets:

Resources:

Disclaimer

This content is for informational purposes only and does not constitute investment advice, financial advice, trading advice, or recommendations. Market conditions can change rapidly. Always conduct your own research and consult with qualified professionals before making trading decisions.