What Is the Hollywood Stock Exchange (HSX)?
Let me explain what the Hollywood Stock Exchange, or HSX, really is. It's an online prediction market where you, as an 'investor,' bet on how various parts of the entertainment industry will perform. You make these bets using credits like Moviestocks, Starbonds, Celebstocks, TVStocks, Movie Funds, and different derivatives.
All trades happen in 'Hollywood dollars,' which you get when you open an account, succeed in trades, or join the site's quizzes. Each investment comes with a ticker symbol, such as IRNM3 for the movie Iron Man 3.
Key Takeaways
Think of the HSX as an entertainment stock market where you buy and sell virtual shares of celebrities and movies using Hollywood Dollars. The value of these shares goes up or down based on the real success of the film or celebrity in the industry—prices can skyrocket with a hit movie or crash with a flop.
It started in 1996, and Cantor Fitzgerald, a brokerage firm from New York City, bought it in 2010. Now, it's based in Los Angeles, California.
Understanding the Hollywood Stock Exchange (HSX)
The HSX game relies on virtual specialist technology created by its co-founders, Max Keiser and Michael R. Burns. It's been running since 1996 and is owned by Cantor Fitzgerald, which also started a real-world version called the Cantor Exchange in 2010.
Earlier versions had a music market for trading artists, prizes for top performers, and even a 'buyout' program where the HSX would buy top players' portfolios for $1 per $1 million in virtual currency if listed on eBay. Those features are gone now, and the eBay selling idea came from Curtis Edmonds, a former Texas lawyer.
During the dotcom boom, HSX got private investments and ran TV ads on cable to draw in players. After the crash, Cantor Fitzgerald units took it over. They've used HSX Moviestock prices to help with gambling operations in the UK, where people bet on U.S. film grosses.
Tip for New Users
If you're new, know that signing up gives you H$2,000,000 in virtual Hollywood Dollars to start playing the HSX game.
The Hollywood Stock Exchange and Prediction Markets
HSX is essentially a prediction market disguised as a game. These markets let you trade on event outcomes, with prices showing what the crowd thinks the probability is. Contracts trade between 0% and 100%, expiring at one or the other—it's like a binary option.
This fits into crowdsourcing, where information on specific topics gets aggregated. Prediction markets are often accurate and cover many subjects, like the Iowa Electronic Markets that use real money. They've gained traction for elections, and sites like fivethirtyeight.com use them in analyses.
Advantages and Disadvantages of the HSX
Trading in Moviestocks and Starbonds helps predict a film's box office in its first four weeks of wide release. With varying numbers of investors, the market can be manipulated fairly easily. There are also special 'warrants' issued during holidays and summer seasons with set prices—they pay out if the box office beats the face value but expire worthless otherwise.
Pros
- Few barriers to entry
- Provides valuable market information to predict movie successes and failures far in advance of opening
Cons
- Small markets are relatively easy to manipulate
- Prices highly vulnerable to events like casting announcements
Example of the HSX
Suppose you believe Al Pacino, with renewed buzz from the Godfather re-releases, has another big film coming. You can use Hollywood Dollars to buy (go long) his StarBond at a certain price. Or, if you think his time is up, you could short sell it to profit from a price drop.
In either case, when the market shifts in your favor and you've made enough, you sell your long position or buy back the short one. The extra Hollywood Dollars are your profit.
The Bottom Line
The HSX gives you an engaging way to predict if upcoming films and star careers will succeed or fail. You start with two million Hollywood Dollars for trading. Successful trades build your virtual wealth and push you toward mogul status.
Hollywood Stock Exchange FAQs
How do you place a trade on the HSX? Once your account is open, you buy and sell in the Movie Market—stars via StarBonds, movies via MovieStocks. Trades, long or short, use Hollywood Dollars, and you get two million to start.
Are there initial public offerings on the HSX? Yes, when a star or movie first lists, it's an IPO. Usually, the price stays the same on the first trading day.
Can you lose Hollywood Dollars on a trade? Yes, if a MovieStock or StarBond you own drops and you sell, you lose money. Shorting is riskier—if the value rises, your losses grow until you close the trade or it expires. For example, shorting at H$10 and it closing at H$100 means a H$90 loss.
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