Prediction markets only work when prices reflect what people genuinely believe. Lumina's markets are CFTC-regulated, and the rules below protect that. These rules come from the ForecastEx exchange rulebook, which governs every market on Lumina. Every trader agrees to them by trading, and here's what they mean in practice.
The short version
Trade on your own view, with your own money, at prices you actually want. Don't fake, coordinate, or force anything, and don't trade markets whose outcome you know or control.
What's prohibited
Manipulation: entering bids to generate artificial volatility or push prices away from what the market really believes.
Wash trading: trades with no real change of ownership, or trades designed to inflate volume.
Prearranged, fictitious, or "money pass" trades: any execution arranged off-exchange, or used to move money between accounts rather than take a real position.
Spoofing and disruptive bidding: placing bids you intend to cancel, to create a false picture of supply or demand.
Front running: trading ahead of someone else's known order.
Insider trading: you can't trade a market if you have material non-public information about its question, if you can influence the outcome (directly or indirectly, at any scale), or if you work for the data source that resolves it.
Bidding without funds: entering bids your account balance couldn't cover if they filled.
One side per market
You can't hold Yes and No contracts in the same market at the same time. If your trades would leave you with both, the opposing positions are offset: each Yes/No pair is closed out and your account is credited $1.00 per pair.
Position accountability and limits
Every market carries one of two size rules in its contract terms:
Position accountability: above a stated level, you can be asked what you're doing with the position and directed to stop increasing it, or to reduce it. Not answering or not complying is itself a violation.
Position limits: a hard cap you can't exceed without an exemption. If your strategy genuinely needs one, contact us and we'll point you through the process.
Regulators also monitor large positions. Above reporting thresholds, positions are reported to the CFTC, and accounts under common ownership or control are counted together.
Where you can trade
Lumina is available to US residents, and activity can be restricted based on your state of residence where a law or regulator requires it. You agree to provide accurate location information and to keep it current.
What happens when rules are broken
Markets are actively monitored. Consequences range from busted trades and forced position liquidation to account restrictions and regulatory enforcement. One thing that is not grounds for reversal: entering a bid at the wrong price. Mistaken-price trades stand, so check the confirmation screen before you tap.
If you see market behavior that looks wrong, tell us: Contacting Lumina support.