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PMF Orders

PMF Orders are special order types designed specifically for investing in and redeeming from Prediction Market Funds (PMFs).

What are PMF Orders?​

PMF Orders allow you to:

  • Invest: Purchase shares in a PMF managed by experienced Writers
  • Redeem: Sell your PMF shares back to the fund
  • Diversify: Gain exposure to multiple markets through a single investment

Types of PMF Orders​

Investment Orders​

Purchase shares in a PMF at the current Net Asset Value (NAV).

Redemption Orders​

Sell your PMF shares back to the fund at the current NAV.

How PMF Orders Work​

Investment Process​

  1. Select PMF: Choose from available PMFs based on strategy and performance
  2. Review Details: Examine the PMF's holdings, performance, and strategy
  3. Place Order: Specify your investment amount in USDC
  4. Execution: Order executes at the next NAV calculation
  5. Share Allocation: Receive PMF shares proportional to your investment

Redemption Process​

  1. Select Holdings: Choose which PMF shares to redeem
  2. Specify Amount: Enter the number of shares or dollar amount
  3. Place Order: Submit your redemption request
  4. Processing: Redemption processes at the next NAV calculation
  5. Settlement: Receive USDC based on current NAV

Net Asset Value (NAV) represents the per-share value of a PMF:

NAV = (Total Fund Value - Liabilities) / Outstanding Shares
  • Calculated regularly (typically daily or more frequently)
  • Reflects current market values of all fund holdings
  • Used as the execution price for all PMF orders

Placing PMF Orders​

Investment Order​

  1. Navigate to the PMF you want to invest in
  2. Click "Invest" button
  3. Enter your investment amount in USDC
  4. Review PMF details and fees
  5. Confirm your investment order

Redemption Order​

  1. Go to your Portfolio > PMF Holdings
  2. Select the PMF shares you want to redeem
  3. Choose redemption amount (shares or dollar value)
  4. Review current NAV and estimated proceeds
  5. Confirm your redemption order

Order Timing and Execution​

Cut-off Times​

  • PMF orders typically have daily cut-off times
  • Orders placed before cut-off execute at that day's NAV
  • Orders placed after cut-off execute at the next business day's NAV

Settlement Period​

  • Investment orders: Usually settle within 1-2 business days
  • Redemption orders: May take 1-3 business days depending on fund liquidity

Fees and Costs​

Management Fees​

  • Annual fee charged by the PMF Writer
  • Typically ranges from 1-3% annually
  • Deducted from fund performance

Performance Fees​

  • Fee charged on profits above a certain threshold
  • Usually 10-20% of profits
  • Only charged when the fund generates positive returns

Transaction Fees​

  • Small fee for processing PMF orders
  • Covers operational costs
  • Disclosed before order confirmation

Benefits of PMF Orders​

Professional Management​

  • Access to experienced Writers' strategies
  • Benefit from their market knowledge and research
  • Reduced need for individual market analysis

Diversification​

  • Single investment provides exposure to multiple markets
  • Reduces risk compared to individual market positions
  • Automatic rebalancing by fund managers

Convenience​

  • Simplified trading through single orders
  • No need to manage multiple individual positions
  • Professional risk management

Risks and Considerations​

Manager Risk​

  • Performance depends on Writer's skill and decisions
  • Writers may make poor investment choices
  • No guarantee of positive returns

Liquidity Risk​

  • Redemptions may be delayed during volatile periods
  • Some PMFs may limit redemption frequency
  • NAV may not reflect true market value during stress

Fee Impact​

  • Management and performance fees reduce returns
  • High fees can significantly impact long-term performance
  • Compare fees across different PMFs

Choosing the Right PMF​

Performance Analysis​

  • Review historical returns and volatility
  • Compare performance to benchmarks
  • Analyze consistency across different market conditions

Strategy Understanding​

  • Read the PMF's investment strategy
  • Understand the markets and sectors targeted
  • Evaluate alignment with your investment goals

Writer Track Record​

  • Research the Writer's experience and background
  • Review their previous PMF performance
  • Check their activity and engagement level

Example PMF Investment​

Scenario: Investing $500 in the "Election Specialist PMF"

Process:

  1. Current NAV: $10.25 per share
  2. Investment amount: $500
  3. Shares received: $500 ÷ $10.25 = 48.78 shares
  4. Management fee: 2% annually
  5. Performance fee: 15% of profits above 5% annually

Result: You own 48.78 shares of the Election Specialist PMF, giving you exposure to their diversified election market strategy.

Best Practices​

Due Diligence​

  • Research PMFs thoroughly before investing
  • Understand the strategy and risks
  • Review all fees and terms

Portfolio Management​

  • Don't put all funds in a single PMF
  • Consider diversifying across different strategies
  • Regular review and rebalancing

Monitoring​

  • Track PMF performance regularly
  • Stay informed about strategy changes
  • Be prepared to redeem if performance deteriorates

Next Steps​