Hollywood Stock Exchange

The Hollywood Stock Exchange, or HSX, is a web-based, multiplayer game in which players use simulated money to buy and sell "shares" of actors, directors, upcoming films, and film-related options.

The technology that drives the Hollywood Stock Exchange is the Virtual Specialist technology invented by HSX co-founders and the exchange's creators Max Keiser and Michael R. Burns, who were awarded a U.S. patent no. 5950176 in 1999 for the invention. Claims of this patent cover trading applications for trading virtual securities using virtual currencies over a network.

Because trading directly affects the prices of the securities — purchasing enough shares of a stock causes its price to rise, and selling causes its price to fall — and because the ultimate value of a moviestock is based on the film's box office, stock prices act as box office predictions. For example, if a particular moviestock trades at "H$40.00", the market is predicting that the movie will gross US$40 million at the box office in the first four weekends of wide release. In 2007, players in the Hollywood Stock Exchange correctly predicted 32 of the 39 major-category Oscar nominees and seven out of eight top-category winners. The Hollywood Stock Exchange is considered a good example of a prediction market.

Previous incarnations of the game included a music market (for purchasing musical artists), prizes for top gainers and, briefly, a "buyout" program in which HSX would reward top players by purchasing their portfolios at a price of US$1.00 per HS1 million if the player listed the portfolio for sale on eBay. These features have been discontinued. The practice of selling portfolios on eBay was inaugurated by Curtis Edmonds, a former Texan lawyer.

HSX attracted some private investment during the dot-com boom and ran TV ads on cable channels in an effort to attract players. After the dot-com crash, HSX was eventually acquired by units of Cantor Fitzgerald. Cantor has used HSX's moviestock prices to assist Cantor's gambling operations in the United Kingdom, in which bettors can place bets on how much money US films will gross. HSX is headquartered in Century City, California.