【Industry Trends】Sports Future Goods Promote Sports Industry

　　Nowadays there are so many kinds of financial derivative instrument with increasing trade, especially future goods business. A lot of sports events happen in 2012, such as Euro 2012 and London 2012, which attracts the whole world’s attention. Can an event, a person, a sport be a kind of future goods? Mr. Wu Shouxiang, chief macroscopic strategy analyst from Hongyuan future goods, says that sports future goods can promote Chinese sports industry and benefit innovation of financial derivative instrument.

　　As development of Chinese economy, Chinese sports business achieves progresses one after another. Either sport for all or high performance, even London 2012, sports need huge investment. Government used to support sports by financial subsidy, sporting goods sales and sponsorship, but now sports lottery contributes to sports business mostly. Sports lottery gives common people a chance to become millionaire immediately and raise a lot of money for the government too. Sports result is not only related to players’ regular training, but also related to coach’s guide, body conditions, psychological quality, strategy, coordination with teammates etc., therefore some accidental events such as bad result will reduce sponsors and other stockholders’ investment profit. How to find a tool to avoid investment risk? “Sports future goods” turns up.

　　Function and Feature of Sports Future Goods

　　The price of sports future goods produces by many deals and negotiations. Under fierce competition and investors surge, sports future goods reflect events expectation more exactly.

　　First, Sports Future Goods Can Discover Price.

　　The price of sports future goods and prediction function has such a logic relationship. If there are two investors: A and B. they predict that Chinese players win all champions of table tennis events with probabilities 65% and 75% respectively. If A wants to sell this future and B wants to buy, both will change their predictions and the price is between 6.5 and 7.5 Yuan. Because A and B only get a few of information, they presume other investors own information they don’t know. Based on rational quote, the final price is still between 6.5 and 7.5 Yuan. Prediction and price change frequently when many traders crowd in the market, the price can reflect market prediction to some event, which benefits efficient investment allocation.

　　Price discovery function of sports future goods has 3 features:

　　Firstly, the price of sports future goods can reflect new market information in time and change as time.

　　Secondly, sports events will have clear result, so the price will change regularly.

　　Thirdly, the higher price is, the more bidding contracts are at that price. So-called bidding is guessing the event results correctly. In another word, as the price going up and prediction accuracy rating higher and higher, there will be more bidding contracts.

　　Second, Sport Future Goods Can Resist Risk.

　　Sports future goods can resist investment risk in sports industry. For instance, Liu Xiang couldn’t accomplish his competition because of physical reason, which influenced advertisers greatly. Coordinating with sports lottery, sports future goods reduce investment risk and promote sports lottery. Sports lottery is one way profitable mode; but sports future goods are both way mode. Whatever event happens or not, investor will get profit through operation. If one enters into lottery market with plenty of money, fund can’t be withdrawn when regretting or encountering accident. However, if there are corresponding sports future goods, investor can stop loss money.

　　With a great many investors and efficient market, sports future goods can discover price and guide investor to make correct decision. Therefore, sports future goods bring investor more correct market information.

　　Sports Future Goods Promote Sports Investment

　　Based on function of price discovery, sports future goods reflect complete information to investors by unique trade system and increase prediction accuracy; sports future goods can offset with sports investment and lottery, reverse direction operation to similar event future goods can make up loss and reduce risk. These two features promote sale of sports lottery and sports industry investment.

　　If sports future goods can come into the market in exchange, clear and normalized operation will boost management of sports event and sports lottery sale.

　　Providing sports future goods becoming Chinese sports industry, it will push forward sports business financing and Chinese sports lottery. We should do research theoretically and practically and set up sports future goods market in China.