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Nothing Ever Happens: Polymarket bot that always buys No on non-sports markets

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Re: Nothing Ever Happens: Polymarket bot that always buys No on non-sports markets

#251

Post by thetailrisk »

TeMPOraL wrote: post #242
miki123211 wrote: post #239

Earlier quoted context omitted.

The purpose of any price-based system is to communicate knowledge, not necessarily insider knowledge. There are actually two theories on insider knowledge. One states that allowing insider trading is beneficial, as it allows prices to better match the underlying reality, the other states that this discourages non-insider trading, which actually makes the prices worse. Stock markets lean heavily towards the second the…

Why would encouraging non-insider training be desirable in the first place, other than to create a more high-status form of gambling, with higher spouse acceptance factor than smoke-filled room poker games? People with no inside knowledge[0] are just trading on vibes, how is that useful for the economy? -- [0] - Or external knowledge, but actual knowledge - thinking of hedge funds stalking CEOs as they fly in private…

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Re: Nothing Ever Happens: Polymarket bot that always buys No on non-sports markets

#252

Post by thetailrisk »

vasco wrote: post #224
jonahx wrote: post #205

Earlier quoted context omitted.

That's not how it works. 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.

Smart people cannot predict things by 'research'. "Will the US strike Iran by X date" going from 20% likelihood to 80%+ within hours points simply to insiders. You can do research to know the US would strike, there's no other point in moving multiple carriers over to somewhere. But exactly WHEN is not researchable. This applies to most other bets. So lets stop pretending there's anything more than 2 cohorts, insiders…

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Re: Nothing Ever Happens: Polymarket bot that always buys No on non-sports markets

#253

Post by thetailrisk »

kristopolous wrote: post #113
gowld wrote: post #104

Earlier quoted context omitted.

The whole premise of prediction markets is that the few people whose perception do match outcomes make bets to push the money-weighted average perception toward outcomes. If perceptions still don't match outcomes at that point, average return is 0 minus transactions, with high variance.

huh? that sounds like ideology and not empirical observation.

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Re: Nothing Ever Happens: Polymarket bot that always buys No on non-sports markets

#254

Post by busssard »

jonahx wrote: post #191
hamasho wrote: post #190

Earlier quoted context omitted.

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.

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…

on the other hand, similar to that one old assassination page, where you bet on the death date of people, it might encourage someone to make an event happen and thus fabricate the insider knowledge if the price is high enough.

So the feedback from prediction market turns around, so you can essentially buy events if you put enough money in.

Re: Nothing Ever Happens: Polymarket bot that always buys No on non-sports markets

#255

Post by _cadp »

miki123211 wrote: post #239
okhobb wrote: post #183

Earlier quoted context omitted.

The purpose of prediction markets is to communicate insider knowledge.

The purpose of any price-based system is to communicate knowledge, not necessarily insider knowledge. There are actually two theories on insider knowledge. One states that allowing insider trading is beneficial, as it allows prices to better match the underlying reality, the other states that this discourages non-insider trading, which actually makes the prices worse. Stock markets lean heavily towards the second the…

>the other states that this discourages non-insider trading, which actually makes the prices worse

This theory is fundamentally not credible, the other side of any trade you make on the stock market is essentially always going to be vastly more sophisticated than you. Insider trading makes zero difference to the end-user.

The credible argument against insider trading is that it's a form of theft. You are making trades based on information which does not belong to you, and which you have an obvious duty to protect. You are essentially stealing from the people you work for.

Re: Nothing Ever Happens: Polymarket bot that always buys No on non-sports markets

#256

Post by Lockal »

gruez wrote: post #100
fer wrote: post #90

Earlier quoted context omitted.

There are quite a few of those, my favourite: https://polymarket.com/event/will-jesus-christ-return-before... If you put all your money on no, you get 4% if you win, and if Jesus comes back and you lose, money won't matter.

>you get 4% if you win, This locks up your money in the meantime, right? If so, considering the fed funds rate is 3.64% (and you can probably get higher rates on stablecoins), a huge chunk of those "winnings" is going to be eaten up by the opportunity cost of the money.

You forget that Polymarket is just a casino, and the house always wins.

For example, recent events show that any bet can be selectively disputed by arbitrary reason ("we found insiders", "we found this immoral/illegal", etc.).

And for perpetual events - there is not a single week without a hack (https://www.web3isgoinggreat.com/)

Re: Nothing Ever Happens: Polymarket bot that always buys No on non-sports markets

#257

Post by Orygin »

eru wrote: post #194
khimaros wrote: post #188

Earlier quoted context omitted.

https://en.wikipedia.org/wiki/The_purpose_of_a_system_is_wha...

Compare and contrast https://www.astralcodexten.com/p/come-on-obviously-the-purpo...

Why does the page have a non-removable blue filter? Feels like a popup shadow that doesn't go away...

Re: Nothing Ever Happens: Polymarket bot that always buys No on non-sports markets

#258

Post by jfengel »

miki123211 wrote: post #239
okhobb wrote: post #183

Earlier quoted context omitted.

The purpose of prediction markets is to communicate insider knowledge.

The purpose of any price-based system is to communicate knowledge, not necessarily insider knowledge. There are actually two theories on insider knowledge. One states that allowing insider trading is beneficial, as it allows prices to better match the underlying reality, the other states that this discourages non-insider trading, which actually makes the prices worse. Stock markets lean heavily towards the second the…

Stock markets also want to keep executives honest. When the insider can affect the outcome, it creates bad motives. They don't want the CEO selling a bunch of puts, then deliberately tanking the stock. Not for the other bettors, but because the institution is about business.

Prediction markets are doing a bit of that. Some won't take bets on an assassination.

Re: Nothing Ever Happens: Polymarket bot that always buys No on non-sports markets

#259

Post by mapt »

miki123211 wrote: post #239
okhobb wrote: post #183

Earlier quoted context omitted.

The purpose of prediction markets is to communicate insider knowledge.

The purpose of any price-based system is to communicate knowledge, not necessarily insider knowledge. There are actually two theories on insider knowledge. One states that allowing insider trading is beneficial, as it allows prices to better match the underlying reality, the other states that this discourages non-insider trading, which actually makes the prices worse. Stock markets lean heavily towards the second the…

In the hypothetical Anarcho-Capitalist finance world, the remedy for a breach of fiduciary duty (corporate graft / insider tips) looks more like Jim Bell than Chuck Rhoades.

Re: Nothing Ever Happens: Polymarket bot that always buys No on non-sports markets

#260

Post by Majromax »

fooker wrote: post #181
Majromax wrote: post #179

Earlier quoted context omitted.

> picking up pennies in front of a steamroller. This or any other statistical play is only 'in front of a steamroller' if you do it with leverage, especially if notionally uncorollated bets suddenly move together. Bets on Polymarket have limited downside by design, and bets in different categories are obviously unrelated to each other. Without having looked into this in detail, however, I suspect the problem would be…

Leverage is not the steamroller here. It’s the 90% chance of making 1$ vs 10% chance of losing 100$. The exact numbers vary, the expectations even out with high volume stocks but prediction markets do not because of rounding that favors the house.

That's just the binary nature of the bet. You address that in a real trading strategy with (fractional) Kelly position sizes. Anyone doing this for actual money would also be well served by implementing continuous monitoring and active risk management over top, in order to limit maximum drawdowns if the trend evaporates.
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