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The microstructure of wealth transfer in prediction markets

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Re: The microstructure of wealth transfer in prediction markets

#141

Post by HNisCIS »

dist-epoch wrote: post #114
NickC25 wrote: post #113

Earlier quoted context omitted.

With the venezuela attack, the real trade wasn't on Polymarket or Kalshi. The trade was going long the 3x Oil&Gas ETFs the trading day beforehand. There was huge buying for absolutely zero perceived reason...then boom we just straight up kidnapped Maduro.

It's not necessarily illegal use of secret information. There exists "alternate data", some companies monitor all kinds of stuff, satellite pictures, etc, some of these companies surely saw the inevitable asset positioning just before such a big attack (150 planes). Just like the Ukraine invasion was first visible on Google Maps as traffic jams !!! at the border at midnight https://www.washingtonpost.com/technology/2…

Counting cars in Best Buy parking lots on black friday used to almost be a meme in the GIS community until ai models became reliable enough.

You can also do entertaining things like determine if a factory/data-center is running at full capacity by looking at the fans in the cooling stacks. Satellites take the red, green, and blue channels separately at different times so you can see if a fan is spinning through the apparent chromatic aberration of the blades, same deal with anything else that spins or moves. If you know the satellite you're buying imagery from, its TLE and a little information about the sensor you can work out all sorts of fun details.

Re: The microstructure of wealth transfer in prediction markets

#142

Post by HNisCIS »

eru wrote: post #128
dist-epoch wrote: post #114

Earlier quoted context omitted.

It's not necessarily illegal use of secret information. There exists "alternate data", some companies monitor all kinds of stuff, satellite pictures, etc, some of these companies surely saw the inevitable asset positioning just before such a big attack (150 planes). Just like the Ukraine invasion was first visible on Google Maps as traffic jams !!! at the border at midnight https://www.washingtonpost.com/technology/2…

That's neat. Though I'd say it was the first public sign. The US had been telling anyone willing to listen for weeks beforehand that an invasion was coming.

Disbelief and normalcy are a hell of a drug. Unless someone fully expects something terrible to happen and they are deliberately trying to find out when it'll happen, most people will happily ignore all of the signs until it's too late.

Just look at the lead up to the Ukraine invasion, the US intelligence services were practically screaming from the rooftops that it was happening. Russians were obviously stacking up on two borders. Meanwhile, reporters were on the street asking people how they felt about the oncoming invasion and they all said some variation of "they've been threatening that forever, it's all talk, it won't happen".

Re: The microstructure of wealth transfer in prediction markets

#143

Post by asdff »

dist-epoch wrote: post #114
NickC25 wrote: post #113

Earlier quoted context omitted.

With the venezuela attack, the real trade wasn't on Polymarket or Kalshi. The trade was going long the 3x Oil&Gas ETFs the trading day beforehand. There was huge buying for absolutely zero perceived reason...then boom we just straight up kidnapped Maduro.

It's not necessarily illegal use of secret information. There exists "alternate data", some companies monitor all kinds of stuff, satellite pictures, etc, some of these companies surely saw the inevitable asset positioning just before such a big attack (150 planes). Just like the Ukraine invasion was first visible on Google Maps as traffic jams !!! at the border at midnight https://www.washingtonpost.com/technology/2…

You could see USAF and navy air power operating in venezuela on ads-b. I was shocked seeing F15s. You'd think there'd be no way the military would have ads-b activated while performing military operations.

Re: The microstructure of wealth transfer in prediction markets

#144

Post by asdff »

LeifCarrotson wrote: post #47
renewiltord wrote: post #22

Earlier quoted context omitted.

The Polymarket twitter accounts are massive ragebaiters. This is sports betting with some two minutes hate added in. I have to say I was this huge fan of the idea and I didn’t anticipate it would happen like this.

I have occasionally tried checking Polymarket and Kalshi to get an idea of the general political/cultural/technological consensus on various issues that are difficult to research otherwise, eg. "what are the chances that the Senate changes hands in the 2026 midterms?" People have thought about it enough to wager a million dollars and the consensus is at about 1/3. I have this abstract prediction market in my head, ea…

Polymarket is currently predicting a 3% chance of Christ returning by 2027

https://polymarket.com/event/will-jesus-christ-return-before...

Re: The microstructure of wealth transfer in prediction markets

#145

Post by eru »

HNisCIS wrote: post #142
eru wrote: post #128

Earlier quoted context omitted.

That's neat. Though I'd say it was the first public sign. The US had been telling anyone willing to listen for weeks beforehand that an invasion was coming.

Disbelief and normalcy are a hell of a drug. Unless someone fully expects something terrible to happen and they are deliberately trying to find out when it'll happen, most people will happily ignore all of the signs until it's too late. Just look at the lead up to the Ukraine invasion, the US intelligence services were practically screaming from the rooftops that it was happening. Russians were obviously stacking up…

Well, one problem is that the US intelligence services might have a credibility problem with the general public.

Re: The microstructure of wealth transfer in prediction markets

#146

Post by graemep »

teknopaul wrote: post #85
nostromo wrote: post #83

Earlier quoted context omitted.

That person is reportedly in jail and facing serious time. https://finance.yahoo.com/news/trump-jails-venezuela-leaker-... Anyone with a security clearance making bets like this is not a smart person.

Stats on politicians trading habits, indicates insider trading like this is standard practice in the USofA. No beleives MAGA nuts are trading experts.

A number of Trump's cabinet advisors have strong backgrounds in finance. At least two former hedge fund managers and one VC that I know of in prominent positions and I do not know much about American politics.

Re: The microstructure of wealth transfer in prediction markets

#147

Post by graemep »

eru wrote: post #133
bs7280 wrote: post #71

Earlier quoted context omitted.

You are not wrong, and I should clarify I also have a big problem with the current state of legal insider trading of elected officials, but this polymarket problem is much more extreme. You can get a guaranteed 100-1 payout by blowing up some random people on the other side of the planet. Way worse than making even 2-5x on a leveraged futures bet with insider info. In that example, the victim is usually just other ri…

Well, insider trading should be legalised in general. It would be better for the general public. See https://en.wikipedia.org/wiki/Insider_trading#Arguments_for_...

It would deter those who are not insiders from investing as returns would shift from them to insiders.

As the biggest social benefit securities markets provide is to enable raising capital this is a huge drawback and makes things worse for the general public.

Re: The microstructure of wealth transfer in prediction markets

#148

Post by pwagland »

An interesting article, however my question is technical.

In the "The Mechanism of Extraction" section, how is that image made? It is nicely laid out, and has a nice "hand-drawn" feel. This is a good format for many technical drawings, but I have not found any tools that could create this.

Re: The microstructure of wealth transfer in prediction markets

#149

Post by misja111 »

I don't follow this part, can somebody maybe explain?

> Yet on Kalshi, a CFTC-regulated prediction market, traders have wagered vast sums on longshot contracts with historical returns as low as 43 cents on the dollar.

On prediction markets traders can bet both sides. E.g. on Polymarket I can currently bet that Greenland will be acquired by USA before 2027 and get 4:1 odds: or I can bet that this doesn't happen, and give 4:1 odds. If these odds are off, doesn't this mean that one side gets a bad return on investment, however the other side gets an equally good return?

On balance the average return on investment by traders should just be 100 cents minus the margin of the prediction market, which tends to be only a few percent.

Re: The microstructure of wealth transfer in prediction markets

#150

Post by frutiger »

pwagland wrote: post #148

An interesting article, however my question is technical. In the "The Mechanism of Extraction" section, how is that image made? It is nicely laid out, and has a nice "hand-drawn" feel. This is a good format for many technical drawings, but I have not found any tools that could create this.

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