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We're creating a website to sell flights futures contracts, shifting the risk and hassle of timing your airfare purchases to us, the contract underwriters. The users specify their travel dates, times and routes, and we give them a contract price. If they choose to enter the contract, then that's it, they're done. Before the specified contract end date, we execute the transaction and send the user their flight details at the specified price. It's a bit hard to understand, so let's walk through a situation. Susan wants to travel to Venice any weekend in August, and she'll fly anytime Saturday after 9am in the morning. She wants to be back at her home airport of Boston within 7 days of leaving. The tickets are currently $800, which is $15 cheaper than yesterday, but $25 more expensive than a week ago. Susan is torn--should she buy the flight now and lock in the $800 or wait to see if it drops again? Fortunately for Susan, she doesn't have to decide. She goes to flightfutures.com and enters her criteria with a contract end date of June 1 and gets a contract quote at $750. She is ecstatic to see a lower price and is tired of monitoring flight prices every day, so while she doesn't like the idea of waiting for her exact flight details to arrive, she purchases the contract so that she can redirect her energy elsewhere. Five weeks later, flightfutures emails her a ticket to Venice for August 11th to Venice, and now she is all set to travel! We're really excited about this idea because we believe that we can predict flight prices. Currently, algorithms determine flight prices using a combination of supply, demand, time of flight, oil prices and other factors, and we think that we can predict flight movement enough so that we can be right at least 51% of the time. We are currently running regressions on past flight data and coming up with a contract pricing algorithm, so an economics, math or computer science majors are welcome! We already have a fabulous front-end designer, business developer and statistics regressionist, but we need more quant and econ people! Find me @yin_amy and we can talk :)
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