201–210 of 298 posts
Earlier quoted context omitted.
That's just how limit order books work with mark-to-market pricing
Could you point me towards some resource that would help me understand what you wrote? Genuinely curious about how this stuff works
https://x.com/sterlingcrispin/status/2043723823678382254 They admit no returns. But it does seem like a fun project and nowhere does it say anything about returns or profits so not scammy imo just funny meme backed code
> They admit no returns. So it's not a useful trading strategy. Good to know. It might have worked out that the human tendency towards optimism biased the Yes side, but Polymarket is watched closely enough by traders that the pricing is apparently realistic. Now if you could bet against minor crypto coins, which almost always go down... But if you could, there would be traders pricing them realistically. Everybody ha…
Earlier quoted context omitted.
The purpose of prediction markets is to communicate insider knowledge.
and facilitate insider trading, like how do people miss that part
There's a ton of scholarly debate about it, and at least most of the early stuff was pretty earnest. But rather than the debate becoming more refined and nuanced over time it seems to have bifurcated along partisan (or partisan adjacent) lines like everything else, similar to the Keynesian/Misesian divide.
Earlier quoted context omitted.
Yes exactly. The bot has zero risk management and I have a strong disclaimer on the github it is essentially a meme. 73% of all polymarkets do resolve to No though. There's a good dataset on huggingface if you wanted to do some data science https://huggingface.co/datasets/SII-WANGZJ/Polymarket_data
> 73% of all polymarkets do resolve to No though. I bet the average price for a no bet across these markets is 73 cents.
Whether there is enough of a predictable bias there to snag enough low return high probability bets to beat the vig and not shift the markets I have not looked into in any way,but it is a known bias with them.
The real money to be made in prediction markets is being the ones with the actual knowledge which is arguably why they are useful and why for some topics, people find them abhorrent.
Earlier quoted context omitted.
They're far from facts, but have an important advantage over most other sources: the bettors are motivated to predict truth. News sources are motivated to get clicks, to appeal to certain audiences, and to retain tribal customers. None of these create incentives for truth. You can seek out smart, well-informed and principled journalists who will prioritize truth-seeking over money-making. There are some. But the fact…
They are motivated to pick what they believe is most likely to happen. The develope their idea of what is most likely to happen for the news. The reporters use their bets to wrote stories predicting what will happen. See the loop?
First, you have inside traders. Then, among legitimate bettors, you have smart people using multiple data sources (not just the "news") and doing sophisticated analysis that most journalists cannot do, and are not motivated to do -- again, because their incentives are different.
Earlier quoted context omitted.
Could you point me towards some resource that would help me understand what you wrote? Genuinely curious about how this stuff works
https://en.wikipedia.org/wiki/Efficient-market_hypothesis might be a good start.
Earlier quoted context omitted.
https://en.wikipedia.org/wiki/Efficient-market_hypothesis might be a good start.
Step 2: https://en.wikipedia.org/wiki/Grossman%E2%80%93Stiglitz_para...
> [...] if prices perfectly reflected available information, there is no profit to gathering information, in which case there would be little reason to trade and markets would eventually collapse.[2]
That's a stupid way to formulate this. Markets wouldn't "collapse". They would get slightly less efficient until equilibrium is restored to where arbitragers can make enough money to keep prices at that level of efficiency.
Earlier quoted context omitted.
If they're appropriately priced, you can't win money at all, unless you have insider knowledge.
I hate that many people or even the news and scientists have already started to see the odds of prediction market as fact. I'm sure in the near future, policy decisions or war strategies will be decided by prediction markets' odds, if they are not already being used.
Earlier quoted context omitted.
Step 2: https://en.wikipedia.org/wiki/Grossman%E2%80%93Stiglitz_para...
Yes, but I always found that objection a bit silly. It's like pointing out that real cows are obviously not perfect spheres nor do they live in a vacuum. > [...] if prices perfectly reflected available information, there is no profit to gathering information, in which case there would be little reason to trade and markets would eventually collapse.[2] That's a stupid way to formulate this. Markets wouldn't "collapse"…
Meanwhile Two Sigma is hiring alpha quants to be AI research scientists at $250k starting salary + bonuses.
Even if we're just talking about the HFT/sell-side, there clearly exist various anomalous inefficiencies that can be exploited.
Fama's guy doesn't agree either [1]
https://www.ft.com/content/813b3d76-6ef1-427d-a2e0-76540f58a...