Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

github.com

Post reply on HN
Print view View original

281–290 of 298 posts

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

#281

Post by cortesoft »

traderj0e wrote: post #278
cortesoft wrote: post #160

Earlier quoted context omitted.

I assume all the 'no' bets have to have an explicit end date, otherwise the 'no' bet could never win? The time horizon is never unknown on these bets.

The time horizon is unknown sometimes. One example event, "what will happen before GTA VI?" with markets like "China invades Taiwan" and "Jesus Christ returns." The NO for the second one is only 52c rn. Maybe that resolves if GTA VI is permanently canceled?

Yeah, those sorts of bets seem clearly bad unless there is an explicit time limit on them. Factoring in how long your capital is locked up in the bet and the opportunity cost of it being locked up has to be accounted for in determining your expected gains.

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

#282

Post by UncleMeat »

okhobb wrote: post #183
jfengel wrote: post #180

Earlier quoted context omitted.

If they're appropriately priced, you can't win money at all, unless you have insider knowledge.

The purpose of prediction markets is to communicate insider knowledge.

People say this but I don't believe that it is true.

The original theoretical purpose was to incentivize the creation of new knowledge, not reward insider knowledge that already exists. For example, to fund research that helps answer some unanswered question.

Today, the purpose is obviously gambling. We can see that clearly from the marketing.

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

#283

Post by naniwaduni »

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…

Stocks are a financing mechanism. They're useful for the economy independent of the price discovery aspect in the much the same ways that lending is, except that instead of receiving an obligation of future payment you're compensated on vibes.

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

#284

Post by eru »

kristopolous wrote: post #228
eru wrote: post #201

Earlier quoted context omitted.

https://en.wikipedia.org/wiki/Efficient-market_hypothesis might be a good start.

That's pure ideology and not empirical. There's you know, even a large section there in that article pointing that out

The index fund industry would like to have a word with you.

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

#285

Post by vasco »

TheCowboy wrote: post #237
vasco wrote: post #224

Earlier quoted context omitted.

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…

It's an empirical fact that smart people can predict things by doing research. See Tetlock's book Superforecasting. I've been doing it profitably myself for almost 10 years now. I have zero special inside knowledge, and no access to any other non-public information. > Will the US strike Iran by X date Last year I did think the market for a strike on Iran was significantly underpriced given the information and conditi…

You haven't been profitable for 10 years on prediction markets and you being profitable doesn't mean anything in regards to insiders or the rigging of a market.

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

#286

Post by bofadeez »

eru wrote: post #215
bofadeez wrote: post #210

Earlier quoted context omitted.

Maybe not "collapse" in a the sense of going to zero but if there was no profit to trading, then the quant trading industry would not exist, trading profits would 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…

As I said, if we woke up this morning and prices were magically efficient in an idealised sense, at most a few quants would go home and retire early, and tomorrow we'd be back at the level (in-) efficiency that allows people to be market makers.

How can prices reflect all available information if there's no profit to collecting the information and there are no informed quant traders? Who is collecting the information exactly so that prices can reflect it and what is their incentive for doing so? Efficiency doesn't happen magically or automatically - traders create it. It's like a kaggle contest* to process information, with the incentive being profit.

You don't believe in the existence of residual return orthogonal to priced cross sectional risk factors (alpha)? E.g. Trends, momentum, volatility clustering, etc. many easily demonstrable inefficiencies. VPIN and order flow toxicity are highly predictive features. Most HFT MM especially in crypto involves hybrid alpha in addition to the (visible) bid-ask spread, which it itself an "inefficiency" to compensate market makers like Jane Street and other successful firms that operate on the assumption that weak form EMH is not accurate.

* https://www.kaggle.com/competitions/jane-street-real-time-ma...

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

#287

Post by worldsavior »

kwar13 wrote: post #227
worldsavior wrote: post #220

Earlier quoted context omitted.

That's not true. The different outcomes don't have any relation to each other.

If you had only bothered to open the link and understand what it even being said. If you don't think it's true, then go ahead and arb polymarket for all the incorrect pricing.

What you said and what the link said were interesecting but not equal.

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

#288

Post by eru »

bofadeez wrote: post #286
eru wrote: post #215

Earlier quoted context omitted.

As I said, if we woke up this morning and prices were magically efficient in an idealised sense, at most a few quants would go home and retire early, and tomorrow we'd be back at the level (in-) efficiency that allows people to be market makers.

How can prices reflect all available information if there's no profit to collecting the information and there are no informed quant traders? Who is collecting the information exactly so that prices can reflect it and what is their incentive for doing so? Efficiency doesn't happen magically or automatically - traders create it. It's like a kaggle contest* to process information, with the incentive being profit. You do…

I don't know what your question is about?

I would have hoped that by now it was obvious that we are talking about a _specific_ weak form of the EMH that takes friction into account?

What is your whole first paragraph about? Who are you trying to convince? Where's the strawman that claimed that the strongest version of EMH that you can imagine is literally true?

There's no single weak form of EMH that could be accurate or inaccurate: there are many versions of the EMH in various strengths and dimensions (that can be accurate or inaccurate).

To be more specific: Jane Street believes (or acts lie they believe) that markets are at least efficient enough that it takes a lot of effort for them to make money. As a very, very weak form: someone doing chart astrology, eh, I mean technical analysis, on S&P 500 stocks won't beat the market. But even much stronger versions than this are defensible.

The real strong forms that say that all information is preciously reflected in profits is a simplifying assumption you can sometimes make to make your life easier. Just like you sometimes neglect friction in physics. But when you want to decide how long your train needs to emergency brake, you kinda need to take friction into account. Similarly, when trying to make money in the market or trying to understand how others like Jane Street make money, the strongest EMH is not a good guide.

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

#289

Post by bredren »

scared_together wrote: post #271
suzzer99 wrote: post #213

Earlier quoted context omitted.

Yeah, I can't say for sure it's going to happen, but I can clearly see a path where AI ends the middle class in developed countries, which has really only existed in its current form since WWII. Most people can't imagine that.

I can imagine that, but I struggle to imagine that happening tomorrow, which is part of the GP’s point.

I suspect it has already happened. People just don’t realize it yet.

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

#290

Post by bofadeez »

eru wrote: post #288
bofadeez wrote: post #286

Earlier quoted context omitted.

How can prices reflect all available information if there's no profit to collecting the information and there are no informed quant traders? Who is collecting the information exactly so that prices can reflect it and what is their incentive for doing so? Efficiency doesn't happen magically or automatically - traders create it. It's like a kaggle contest* to process information, with the incentive being profit. You do…

I don't know what your question is about? I would have hoped that by now it was obvious that we are talking about a _specific_ weak form of the EMH that takes friction into account? What is your whole first paragraph about? Who are you trying to convince? Where's the strawman that claimed that the strongest version of EMH that you can imagine is literally true? There's no single weak form of EMH that could be accurat…

Question is about EMH and how you expect efficiency to be achieved absent profit for collecting the information.

There are 3 accepted forms of EMH. I'm talking about weak form - just price history and nothing else. E.g. formulaic alpha have demonstrable predictive value in modeling.

All that to say you believe trading profits are real. Maybe you just need to learn more about what a buy side alpha quant at two sigma does for a living. Trading models can be robust and exploit real inefficiencies. Weak form EMH is demonstrably false on it's face, as you agree.

Post reply on HN