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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

#61

Post by jfrbfbreudh »

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.

Yes, someone is on the other side of the losing trade, but how many people (not firms) do you know who write contracts for short term options?

I personally don’t know any, and I worked at one of the biggest HFT firms for a few years.

The losing side(s) of these positions are heavily hedged, and are happily making money on volume and volatility. (And making record profits this year)

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

#62

Post by OutOfHere »

firebot wrote: post #46
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.

Most gamblers prescribe to the cost sunk fallacy and keep 'one more time'ing it to bankruptcy. Math wins over your feels every time.

If you follow your math, such gambling losers don't really have that much money to bet on an ongoing basis. The ones who support the losing side on prediction markets are the ones who usually do fine, but sometimes are taken by surprise.

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

#63

Post by OutOfHere »

iambateman wrote: post #41
wslh wrote: post #34

I would be careful about attributing all of this to ordinary insider trading. Another plausible explanation is that some activity could come from state linked or intelligence adjacent actors, where the goal is not only profit but also testing or exploiting prediction markets as an auxiliary information channel.

Occam would disagree.

The most Occam-safe explanation is not insider trading but actually hard work in analytics to rapidly surface intelligence from X and other alternative data sources.

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

#64

Post by OutOfHere »

dogtorwoof wrote: post #10
echelon wrote: post #7

What value do prediction markets give to anyone not in the insider trading class? I predict these will be banned when someone finally uses them as an "assassination market".

I would argue that the sole value of prediction markets is to make insider knowledge accessible to the general public, quicker than it normally would. That’s why these platforms saying things like “we will roll out insider trading” is laughable.

Just because an insider bets on something does not in any way make the bet obvious to onlookers until the event is materialized for all to see. There is absolutely no surfacing of intelligence here because big bets are on both sides, winning and losing.

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

#65

Post by casey2 »

OutOfHere wrote: post #62
firebot wrote: post #46

Earlier quoted context omitted.

Most gamblers prescribe to the cost sunk fallacy and keep 'one more time'ing it to bankruptcy. Math wins over your feels every time.

If you follow your math, such gambling losers don't really have that much money to bet on an ongoing basis. The ones who support the losing side on prediction markets are the ones who usually do fine, but sometimes are taken by surprise.

Statcon 101: Gambling addicts take loans to gamble, those loans are sold to your pension fund. Who is the loser?

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

#66

Post by outlore »

There’s a recent Patrick Boyle video which puts it aptly: prediction markets are a wealth transfer from retail investors to trading algorithms and people with security clearances.

Anyway, one thing I don’t understand yet is how new markets are created. They aren’t user generated, so how did an “Iran strike” market exist to begin with?

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

#67

Post by OutOfHere »

operatingthetan wrote: post #11
dogtorwoof wrote: post #10

Earlier quoted context omitted.

I would argue that the sole value of prediction markets is to make insider knowledge accessible to the general public, quicker than it normally would. That’s why these platforms saying things like “we will roll out insider trading” is laughable.

>I would argue that their sole value is to make insider knowledge accessible quicker to the general public. Is anyone using AI to track these audacious and large bets? Seems like you could actually do this to tell which ones are insider info and which are just stupid random bets?

I would just count which side of the bet has more bets above the median bet size with a zero or near-zero bet history. Insiders are more likely to use throwaway accounts than are non-insiders. Spoofers may however deter such analysis. AI may not strictly be needed for analysis.

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

#68

Post by operatingthetan »

OutOfHere wrote: post #67
operatingthetan wrote: post #11

Earlier quoted context omitted.

>I would argue that their sole value is to make insider knowledge accessible quicker to the general public. Is anyone using AI to track these audacious and large bets? Seems like you could actually do this to tell which ones are insider info and which are just stupid random bets?

I would just count which side of the bet has more bets above the median bet size with a zero or near-zero bet history. Insiders are more likely to use throwaway accounts than are non-insiders. Spoofers may however deter such analysis. AI may not strictly be needed for analysis.

I haven't actually used the platforms except looking at betting odds for elections. Do they give any tools for looking at past results and analyzing?

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

#69

Post by bluecalm »

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.

Same goes for sport betting and yet here we are. People like to bet. They willingly bet on things they have guaranteed disadvantage on (casino games like roulette, slots etc.). People also drink pure poison (alcohol), smoke pure poison (cigarettes) and engage in brain dead activities like speeding and street racing.

Gambling should be judged as any other vice - people get something out of it (rush, hope, whatever) not by rational money allocation standards.

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