Does the FX market think that a U.S. invasion of Iraq would lower the likelihood of a nuclear attack on the U.S.?
This scaled claim is judged when the following conditions have been met:
At that point, if USIraq was judged FALSE (i.e., no invasion of Iraq happened), then this claim pays out at the average (weighted for volume) transaction price of NukeUS on the seventh day of the waiting period. On the other hand, if USIraq was judged TRUE (there was an invasion) then this claim pays out at 1.00 - the average transaction price of NukeUS on the seventh day of the waiting period.
The purpose of the seven day waiting period is to allow the NukeUS claim time to adjust its price in response to the news of the U.S. invasion, and also to give shareholders advance warning of the conversion to cash, so that they may immediately convert their cash into NukeUS coupons at the time of this claim's judgment, if they wish.
Given the event that NukeUS is judged before this claim is judged, this claim pays out at the normal time, as if NukeUS is trading at the price it was judged at.
Note: Any price manipulation of NukeUS may be filtered out at the judge's discretion.
USIraq was judged TRUE on 20-MAR-2003. This means that this claim will pay out 1.00 - the average transaction price of NukeUS on 27-MAR-2003.
The last transaction for NukeUS before 27-MAR-2003 was made on 21-MAR-2003 23:30:27 at a price of .14. The average transaction price on 27-MAR-2003 will be compared to .14, and if it is significantly higher or lower, I'll check whether there is something in the news that can have caused this price change in a regular manner or not. Furthermore, I'll check who made the transactions to see whether price manipulation is obvious.
I saw that there were three transactions on NukeUS on 27-MAR-2003: two at a price of .29 and one at a price of .21. The average weighted by the volume is .26333, which I round to .26. I will therefore judge WarXNK at .74. I don't think that there was any price manipulation involved in the transactions for NukeUS.