While most empirical analysis of prediction markets treats prices of binary options as predictions of the probability … of future events, Manski (2004) has recently argued that there is little existing theory supporting this practice. We …

While most empirical analysis of prediction markets treats prices of binary options as predictions of the probability … of future events, Manski (2004) has recently argued that there is little existing theory supporting this practice. We …

; options ; futures ; binary option …While most empirical analysis of prediction markets treats prices of binary options as predictions of the probability … of future events, Manski (2004) has recently argued that there is little existing theory supporting this practice. We …

) identified by a simple type of futures contract that is not commonly used in practice. Prediction markets are also used to …

While most empirical analysis of prediction markets treats prices of binary options as predictions of the probability … of future events, Manski (2004) has recently argued that there is little existing theory supporting this practice. We …

While most empirical analysis of prediction markets treats prices of binary options as predictions of the probability … of future events, Manski (2004) has recently argued that there is little existing theory supporting this practice. We …

Options on crude oil futures are the most actively traded commodity options. We develop a class of computationally … efficient discrete-time jump models that allow for closed-form option valuation, and we use crude oil futures and options data … crucial for modeling crude oil futures and futures options, and we find evidence in favor of time-varying jump intensities …