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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

#231

Post by wallst07 »

lesuorac wrote: post #147
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.

Do they? Afaik, they don't [1]. > WONG: However, Gerry says most of the major airlines in the U.S. eventually soured on fuel hedging. One reason - the Wall Street transaction fees to make these hedges got expensive. > WOODS: Plus, Gerry says the airlines found that they could make money the old-fashioned way by raising prices. Today, none of the major airlines in the U.S. are hedging. Hedging is one of those things t…

Almost every very large company that relies on commodities will have a treasury desk whose sole purpose is to work with future markets, its very common practice. It doesn't matter if one npr article has a anecdote, it exists.

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

#232

Post by wallst07 »

airstrike wrote: post #195
austhrow743 wrote: post #182

Earlier quoted context omitted.

More accurate information about the world allows for more effective decision making.

If people are insider trading so blatantly, there's no "more accurate information" here until it's too late and it's already news. You're just getting scammed

The hole point of a prediction market is to surface insider trading and information asymmetry by voting with what matters most [in trading markets], money.

In other terms, it allows people to transfer risk to money , or information for money.

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

#233

Post by wallst07 »

troyastorino wrote: post #167
janalsncm wrote: post #119

Earlier quoted context omitted.

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…

Yes, 100%, it is information asymmetry. It happens in every "market" in the world.

The goal should be to balance the information asymmetry, not burry it.

Government officials using their power to affect war decisions ought to be a crime on it's own, not surfacing the information to the public through a prediction market.

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

#234

Post by wallst07 »

3eb7988a1663 wrote: post #60
nathancahill wrote: post #53

Earlier quoted context omitted.

I saw a tweet about a trader placing an oil bet when they saw two military aircraft turn around on their way to Iran, via transponder. I believe before the deal was announced.

That also sounds easy enough to fake for some plausible deniability.

Traders have been using satellite images from around the world for DECADES, it seems more likely to be true than a conspiracy from a insider who actually makes the decision or has first line access to it.

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

#235

Post by mint5 »

jaredklewis wrote: post #192
lostlogin wrote: post #172

Earlier quoted context omitted.

> The current setup does sort of seem like a tax on being stupid. More like a tax on being ethical or having any morality.

What is unethical? The good point of prediction markets is that they provide information. This information is available to everyone, for free, which benefits everyone. Insiders help achieve this. Insiders have information and by participating in the market they then expose and share that information. So this is good. If we ban insiders, we're just banning accurate information from getting into the market. If we do th…

Info available to everyone? Yeah nope. That’s like saying the moon is cheese with a straight face.

All anyone knows is that some bloke put money down an hour before the bet resolves.

They don’t know squat about what info those betters have.

Stop telling us the moon is cheese

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

#236

Post by lesuorac »

wallst07 wrote: post #231
lesuorac wrote: post #147

Earlier quoted context omitted.

Do they? Afaik, they don't [1]. > WONG: However, Gerry says most of the major airlines in the U.S. eventually soured on fuel hedging. One reason - the Wall Street transaction fees to make these hedges got expensive. > WOODS: Plus, Gerry says the airlines found that they could make money the old-fashioned way by raising prices. Today, none of the major airlines in the U.S. are hedging. Hedging is one of those things t…

Almost every very large company that relies on commodities will have a treasury desk whose sole purpose is to work with future markets, its very common practice. It doesn't matter if one npr article has a anecdote, it exists.

"Almost"? Can you can name 1 with evidence?

Like if I look up home depot they talk about price volatility and that's the exact opposite of what a hedge produces. I'm honestly starting to doubt if they hedge at all; like why bother using Wall Street as an intermediary and just talk to your suppliers.

> [1] This was another historic quarter for lumber price volatility. During the first few weeks of the second quarter, prices for both framing and panel lumber reached all-time highs before quickly falling from their peaks. As an example, during the second quarter, framing lumber peaked at approximately $1,500 per thousand board feet before falling over $1,000 to approximately $500. While pricing for both framing and panel has come down from the peaks, the average price during the second quarter was still significantly higher than the same period last year. Inflation from core commodity categories positively impacted our average ticket growth by approximately 420 basis points during the second quarter.

[1]: 2021 Q2 - https://ir.homedepot.com/financial-reports/quarterly-earning...

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

#237

Post by airstrike »

wallst07 wrote: post #232
airstrike wrote: post #195

Earlier quoted context omitted.

If people are insider trading so blatantly, there's no "more accurate information" here until it's too late and it's already news. You're just getting scammed

The hole point of a prediction market is to surface insider trading and information asymmetry by voting with what matters most [in trading markets], money. In other terms, it allows people to transfer risk to money , or information for money.

No, that is not the point of a prediction market, though many people have been led to believe as much.

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

#238

Post by busyant »

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…

> You'll need to look for your own individual scheme, ethics be damned.... That's not healthy on an individual level or cumulatively at a societal level.

I was thinking about what you said w/r/t the proximal issue (gambling in prediction markets) and my 1st though was "why is this a big deal? If you're not an insider, just don't participate in these markets ... and then the insiders don't have a counterparty to fleece."

But I thought a little more about and I think you're right. Insider's fleecing others in prediction markets just erodes trust everywhere. And we need a considerable amount of trust in people we don't know for society to function properly.

I don't know the owner at my local hardware store, but I trust that he won't sell me shoddy tools. The same goes for every societal interaction. We need to trust people we don't know. If that gets eroded, we go back a several centuries.

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

#239

Post by hereme888 »

egonschiele wrote: post #196
hereme888 wrote: post #193

Earlier quoted context omitted.

It's an unregulated world of gambling. Like trading DogeCoin. If you had insider knowledge, it was/is legal to trade there as you want.

Ah okay, so it's a case of "it's legal so it's fine", and impact or principles don't come into it.

Um, yes. If I were certain of a price movement before others, I'd take advantage, and so would you. But you can virtue signal with fake empathy if you'd like.

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

#240

Post by hashstring »

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…

Well said.
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