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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

#151

Post by nine_k »

slg wrote: post #117
H8crilA wrote: post #105

Earlier quoted context omitted.

The oil trade structure actually does make sense, because this is how you buy oil, or really any commodity that takes so much space and weight. You order it ahead of time, then if you hold till the contract settles you are allowed to pick it up from the place and in the way designated in the contract specification. In fact you are obliged to pick it up, that's why prices can go negative in exceptional situations. Pre…

>The oil trade structure actually does make sense, because this is how you buy oil, or really any commodity that takes so much space and weight. You order it ahead of time, then if you hold till the contract settles you are allowed to pick it up from the place and in the way designated in the contract specification. In fact you are obliged to pick it up, that's why prices can go negative in exceptional situations. Pr…

The point is that's a dubious derivative of a market that makes sense.

As usual, it's a tax on naive and those who get addicted; the twist is that they are willing to pay it, demand and beg to pay it, so providers spring up, legal or not.

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

#152

Post by int32_64 »

JumpCrisscross wrote: post #84
int32_64 wrote: post #77

It's deeply American how so many of these articles about Kalshi or Polymarket frame the issue as something that can be solved on the American end with the stroke of a pen, especially in a multipolar world where American sanctions increasingly fail. These markets are global with global demand and many of the insiders are on the receiving end of American foreign policy. If an Iranian with a starlink sees a b-2 spirit f…

> especially in a multipolar world where American sanctions increasingly fail You're claiming the U.S. government is impotent against holding Polymarket to account? > These markets are global The trades in question are bets on Polymarket and Intercontinental Exchange Brent oil futures. These are well within the remit of American law enforcement.

>You're claiming the U.S. government is impotent against holding Polymarket to account?

Yes, if US regulators quash Polymarket their lunch will be eaten by a global competitor HQ'd in a country the US can't touch.

A lot of the insider weekend trading of oil is happening on hyperliquid, a DEX associated with developers in Singapore, what can the SEC or CFTC do to them?

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

#153

Post by mr_00ff00 »

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.

> But traders weren’t just active on Polymarket: there were similar surges of oil futures trading activity just hours before Trump announced updates to the conflict that would lower oil prices.

Prediction markets are all the buzz, but banning them isn’t fixing the problem. This has happened forever. Let’s not forget there was an unusual amount of put option buying right before 9/11: https://ideas.repec.org/a/ucp/jnlbus/v79y2006i4p1703-1726.ht...

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

#155

Post by amelius »

mothballed wrote: post #146
jaredklewis wrote: post #134

Earlier quoted context omitted.

The current setup does sort of seem like a tax on being stupid. Why would any non-insider participate in these markets? You’re just asking to get screwed. Though it’s not that different from the stock market, where the folks at WSB happily give their money to Citadel, Jane Street, and friends, because every once a while, one of them hits it big after going all in that the ball lands on green. Gambling is a hell of a…

As a hedge. Say you own real estate in UAE, and you note that insurance does not cover acts of war. Betting on something like "Iran Bombs Dubai" creates some form of real estate insurance for you. Even if you suppose my example is bad, you should be able to envision some case where such hedge is helpful.

Why not get a real insurance, where it is actually verified that your house was bombed?

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

#156

Post by nine_k »

fyredge wrote: post #150
Tade0 wrote: post #139

Earlier quoted context omitted.

Airlines in particular prefer to have a predictable price of fuel, whatever it might be, so they buy futures.

That still does not satisfactorily answer the question though, why don't they just sign a purchase order with N month lead time? That still gives a well defined price ahead of time.

But that's literally what a "future" is.

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

#157

Post by dublinstats »

socalgal2 wrote: post #128

How can I evalutate if this is a real issue for cherry picked. Someone won the lotto last week. They must have had insider knowledge! Oh, no, I forgot to look at all the people who didn't pick a winner. > Sixteen bets made $100,000 each accurately predicting the timing of the US airstrikes against Iran on 27 February How many bets and for what ammounts were made for other days, or that it wouldn't happen on the 27th?

Yes I would have liked to see some more intelligent analysis and statistical justification. This article is just outrage-bait for common consumption.

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

#158

Post by slg »

Tade0 wrote: post #139
slg wrote: post #117

Earlier quoted context omitted.

>The oil trade structure actually does make sense, because this is how you buy oil, or really any commodity that takes so much space and weight. You order it ahead of time, then if you hold till the contract settles you are allowed to pick it up from the place and in the way designated in the contract specification. In fact you are obliged to pick it up, that's why prices can go negative in exceptional situations. Pr…

Airlines in particular prefer to have a predictable price of fuel, whatever it might be, so they buy futures.

Is there a name for the phenomenon of when someone provides a single explanation that is so inconsequential that it ends up being counterproductive because surely they would have given a better explanation if one existed?

If your go-to reasoning for why we need prediction markets is so airlines can have more predictability in their fuel costs, you're inadvertently making a solid argument that we don't actually need prediction markets. And this isn't even getting into the other ways these airlines could satisfy the same need.

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

#159

Post by Buttons840 »

slg wrote: post #100

Say whatever you want about the merits of prediction markets. But I just don't see a way those benefits outweigh the societal dangers of these constant reminders that people in or close to power can freely profit from their positions in the ways the rest of the population can't. There's always talk about the dangers of disincentivizing job creators, but what happens when a society routinely disincentives job havers i…

[flagged]

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

#160

Post by crazygringo »

amelius wrote: post #155
mothballed wrote: post #146

Earlier quoted context omitted.

As a hedge. Say you own real estate in UAE, and you note that insurance does not cover acts of war. Betting on something like "Iran Bombs Dubai" creates some form of real estate insurance for you. Even if you suppose my example is bad, you should be able to envision some case where such hedge is helpful.

Why not get a real insurance, where it is actually verified that your house was bombed?

Because there are many things where insurance doesn't exist.
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