Earlier quoted context omitted.
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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Traders placed over $1B in perfectly timed bets on the Iran war
161–170 of 263 posts
Re: Traders placed over $1B in perfectly timed bets on the Iran war
#162Earlier 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?
I'm not saying it's not out there, but in many cases finding insurance for act of war is difficult. It is certainly rare and almost always far less accessible than using polymarket. If you have a very large holding you can probably get someone to write it for you though.
Re: Traders placed over $1B in perfectly timed bets on the Iran war
#163These headlines always irritate me because they use notional value for sensationalism. The 950m notional is if they were paying for a price move of the whole thing from $0 in cash. But these are highly levered futures contracts. And you are getting in and out at 2 price differences that are close to each other. It’s still shocking corruption and absolutely should be enraging. But that’s because it’s a 10s of millions…
100%.
They might as well quote the Quadrillions changing hands in the OTC derivative package markets.
Re: Traders placed over $1B in perfectly timed bets on the Iran war
#164Earlier 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.
Yes, but the examples where it's good has a name "insurance". It exists, it's generally well regulated, and is not easily exploited.
The reason it works better is because in a prediction market, the person betting against you has no resources or ability to go after you for fraudulent behavior. Whereas an insurance company has both.
Re: Traders placed over $1B in perfectly timed bets on the Iran war
#165Earlier quoted context omitted.
This interpretation is incredibly unlikely. The first and third paragraphs discuss legality, but the middle one was merely talking about likelihood of prosecution? Even then it would be inaccurate: the regulators are not too stupid to put two and two together that you work for a company and got incredibly lucky with your trade
To be clear, I was responding about trading on internal communications, not specifically a raid. The practice of using internal communication to guide trading runs contrary to most company policies. I happen to have worked at a company where this kind of practice was both acknowledged and openly discussed. It was a strange place. > the regulators are not too stupid to put two and two together that you work for a comp…
Looks like you're one of today's lucky 10,000* to learn that insider trading is very much illegal!
Here's a few examples: https://www.sec.gov/spotlight/insidertrading/cases.shtml
Some further advice on the matter: https://www.bloomberg.com/view/articles/2018-08-12/the-10-la...
10 Laws of Insider Trading
1. Don’t do it.
2. Don’t do it by buying short-dated out-of-the-money call options on merger targets.
3. Don’t text or email about it.
4. Don’t do it in your mother’s account.
5. Don’t do it by planting bombs at a company and shorting its stock.
6. Don’t do it while employed at the Securities and Exchange Commission.
7. Don’t Google “how to insider trade without getting caught” before doing it.
8. If you didn’t insider trade, don’t forget and accidentally confess to insider trading.
9. If you are going to insider trade, do it in a company that is far away from a Securities and Exchange Commission office. Like, physically.
10. If you are already under a federal ethics investigation about your ownership or promotion of a stock, don’t insider trade that stock.
Re: Traders placed over $1B in perfectly timed bets on the Iran war
#166You'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.
And this is the whole point.
Prediction markets are supposed to be providing the most accurate predictions.
The most accurate predictions come from insider information.
Poeple complaining about insider trading on prediction markets seem to be missing the point. They're supposed to have insider trading. That's the whole idea.
Re: Traders placed over $1B in perfectly timed bets on the Iran war
#167Earlier quoted context omitted.
Even if you are not "betting" similar trades are happening in the stock market as well. Large movements in oil futures shortly before policy changes are announced.
Insider trading is at least regulated in the stock market, albeit imperfectly. Imagine how much worse it would be if C-levels could just short their own stock during a board meeting. No one without insider knowledge would touch it.
Matt Levine often says something like "insider trading is not about fairness, it's about theft." The problem isn't that it's less fair to some stock traders than others, and that stock trading should be some form of perfect gambling where everyone has an equal chance of success. Stock trading is inherently about exploiting information asymmetries — that is what all "non-insiders" are trying to do. But insider trading is wrong because it's effectively stealing confidential information from the company & shareholders, which is in violation of & conflict with the fiduciary responsibility that board members, executives, and employees generally have towards shareholders.
Conceptually, I think that is the right analogy to think about. Prediction markets "want" to be a more accurate source of information, just like stock markets, so from that lens "getting" information to be more accurate is good. When government officials are placing bets on prediction markets, though, it's a massive violation of operational security, and leaking confidential information. They probably think that they are acting anonymously, but it creates so many opportunities for unfriendly state actors to get information, especially if people do it consistently.
Re: Traders placed over $1B in perfectly timed bets on the Iran war
#168Why wouldn’t the platforms require the identity of people cashing out more than, let’s say, $10k a year to be public? Or at least, require KYC level trail to cash out so it can be investigated later.
It protects 99% of people who want to have fun by losing money and prevents insider trading at no virtually no cost.
Re: Traders placed over $1B in perfectly timed bets on the Iran war
#169Earlier quoted context omitted.
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.
Ok let's work on that then. But meanwhile, close down unregulated websites like polymarket, where there is no verification of actual damage.
Re: Traders placed over $1B in perfectly timed bets on the Iran war
#170Earlier quoted context omitted.
This was my thought. If these markets continue allowing insiders, it’ll drive all of the cash from regular people away. So there will be way less money for insiders to win even if they are allowed. So the perception of insiders is pretty bad for prediction markets as a business imo. The sooner they knock off the rhetoric about the “theory” behind prediction markets and start thinking about it like a business, the soo…
I think the market could adapt if regular people left. Insider trading would become multilayered and complex. Insiders would scheme against lower-level insiders; decisionmakers would try to trick insiders into thinking that one thing will happen before doing the complete opposite thing. The world would become more erratic and unpredictable, even insiders wouldn't know what is going on. Although Polymarket is currentl…
I mean, the thing is, insiders will disagree. Nobody has a crystal ball to predict the future perfectly.
Military operations go awry. Countries react in unexpected ways. Leaders change their minds.
And as a potential event gets closer, insider information changes. Different insiders have different sets of partial knowledge.
You don't even need scheming and tricking. Just regular reality is already complicated enough.