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Traders placed over $1B in perfectly timed bets on the Iran war

theguardian.com

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Re: Traders placed over $1B in perfectly timed bets on the Iran war

#51

Post by georgemcbay »

paulpauper wrote: post #14
beaviskhan wrote: post #9

You'd have to be spectacularly stupid to bet on these kinds of things without having insider knowledge, because you ought to know good and damn well by now that the people with insider knowledge are DEFINITELY betting on them.

couldn't you somehow in theory track the order book to if and when insiders are betting and then copy the trade?

For prediction markets you can find out who the insiders are for different categories over time, see for example:

https://x.com/peterjliu/status/2024901585806225723

But there is still the problem of knowing which new trades the insiders made before the bet is settled (maybe solved by being an insider of the prediction market), and also since prediction markets need money on both sides (you are betting against other people, not the 'house') when the insiders make their buy they probably eat up most of or all of the action on the other side.

Re: Traders placed over $1B in perfectly timed bets on the Iran war

#52

Post by jjav »

UncleMeat wrote: post #45
reactordev wrote: post #32

Prediction Markets require insider trading to function... how do people not know this? It's a setup from day one. If you have the knowledge, you're going to cash in, if you don't have the knowledge, you are throwing your money away.

I've never seen an ad from either Kalshi or Polymarket that says "don't play if you aren't an insider."

The game only works if they also have a lot of people losing money.

Re: Traders placed over $1B in perfectly timed bets on the Iran war

#53

Post by nathancahill »

agumonkey wrote: post #48
beaviskhan wrote: post #9

You'd have to be spectacularly stupid to bet on these kinds of things without having insider knowledge, because you ought to know good and damn well by now that the people with insider knowledge are DEFINITELY betting on them.

considering the scale involved, and the OSINT trend, is it possible that people could monitor and correlate stuff like airplane, or us navy activity to deduce when to enter ?

I saw a tweet about a trader placing an oil bet when they saw two military aircraft turn around on their way to Iran, via transponder. I believe before the deal was announced.

Re: Traders placed over $1B in perfectly timed bets on the Iran war

#54

Post by watwut »

reenorap wrote: post #42

Without them talking about how much people LOST, this entire article is meaningless. With the advent of 0DTE options which dominate options trading, the fact that the notional number of people who made money makes sense because so many more people have lost money.

Of course they made money from other traders. But that is precisedly the issue with insider trading - you are taking money from more honest traders.

Re: Traders placed over $1B in perfectly timed bets on the Iran war

#55

Post by iknowSFR »

andrepd wrote: post #36
paulpauper wrote: post #14

Earlier quoted context omitted.

couldn't you somehow in theory track the order book to if and when insiders are betting and then copy the trade?

Not knowing who are the insiders and who is the dumb flow is like the fundamental problem of hft

You can trade on non-public information if you obtain that information unintentionally. Now you have to be able to prove it’s unintentional if the question came up. A real experience example of this is if you work in an office building and your neighboring company, a public company, is being raided by the FBI. Can you use that information to take a position in the market? Yes, according to multiple attorneys we spoke with.

I bring this up because we assume the trading is coming from insiders but I wonder if the parties behind this have baked in a layer similar to my story above.

To close this back to your comment, and I don’t have an answer here: is knowing who the insiders are and acting on that a crime? If you did know and didn’t report them, are you breaking a law? Or worse, you reported it to the deaf ears of a regulator that are focused elsewhere or are under resourced to respond now?

Re: Traders placed over $1B in perfectly timed bets on the Iran war

#56

Post by andrepd »

3eb7988a1663 wrote: post #49
andrepd wrote: post #36

Earlier quoted context omitted.

Not knowing who are the insiders and who is the dumb flow is like the fundamental problem of hft

How is there enough volume to cover the other side of the bet with these minutes-before trades?

The oil market is, to put it mildly, fucking huge

Re: Traders placed over $1B in perfectly timed bets on the Iran war

#57

Post by bostik »

avaer wrote: post #37
dvt wrote: post #25

Earlier quoted context omitted.

This is what their argument is, and personally I think it's a pretty good one. But the main issue is that retail is getting fleeced and lives are being destroyed by gambling, so non-professional investors should not be able to use it. Imo, the upside (some fisherman with insider knowledge betting on the Strait of Hormuz) doesn't outweight the downside (a large-scale societal gambling epidemic[1]). [1] https://www.psy…

What are they sharing that they know though? That someone's getting bombed in an hour? That the government is rampant with corruption? The first seems arguably treasonous. And the latter seems directly supported and funded by these "prediction markets". If the argument is that prediction markets are truth machines, their social function seems to be support crime on a massive scale and get away with it.

Well, that's the entire point.

If we take a completely utilitarian and amoral viewpoint, the insiders are selling their material, non-public information. The rest of the market participants are buying. From the latter's utilitarian perspective the former are providing a valuable service and getting paid for it. I'm pretty sure there was a legal term for such sales activity...

The only people playing fair are those who don't know how to cheat well enough.

Re: Traders placed over $1B in perfectly timed bets on the Iran war

#58

Post by 3eb7988a1663 »

andrepd wrote: post #56
3eb7988a1663 wrote: post #49

Earlier quoted context omitted.

How is there enough volume to cover the other side of the bet with these minutes-before trades?

The oil market is, to put it mildly, fucking huge

For sure, the real trading markets are huge. I mean the betting platforms.

Re: Traders placed over $1B in perfectly timed bets on the Iran war

#59

Post by OutOfHere »

andrepd wrote: post #56
3eb7988a1663 wrote: post #49

Earlier quoted context omitted.

How is there enough volume to cover the other side of the bet with these minutes-before trades?

The oil market is, to put it mildly, fucking huge

Are you implying that there is arbitrage between the prediction market and the real market? Until now we were assuming that the prediction market is self-contained, with its other side staying within the confines of the prediction market.

Re: Traders placed over $1B in perfectly timed bets on the Iran war

#60

Post by 3eb7988a1663 »

nathancahill wrote: post #53
agumonkey wrote: post #48

Earlier quoted context omitted.

considering the scale involved, and the OSINT trend, is it possible that people could monitor and correlate stuff like airplane, or us navy activity to deduce when to enter ?

I saw a tweet about a trader placing an oil bet when they saw two military aircraft turn around on their way to Iran, via transponder. I believe before the deal was announced.

That also sounds easy enough to fake for some plausible deniability.
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