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

Uncovering insiders and alpha on Polymarket with AI

twitter.com

Post reply on HN
Print view View original

61–70 of 176 posts

Re: Uncovering insiders and alpha on Polymarket with AI

#61

Post by throwaway-99482 »

syntaxing wrote: post #8

Isn’t this the motivation behind polymarket? To incentivize those that have information to bet as a signal of “truth”. What I don’t get is why would anyone bet on this stuff that don’t have insider information besides those with gambling addiction.

It is for people like me. I'm usually right about things before other people even know about them. Bought BTC in 2011, ETH in 2014 (funded the IPO), Tesla in 2013, Microsoft right when they replaced Ballmer (at $30 I think), Nvidia on the Covid crash day in 2020, learned Rust in 2017, took AI seriously two weeks after ChatGPT 3.5 launched. I never had any insider information. I typically have a good feeling for things.

Re: Uncovering insiders and alpha on Polymarket with AI

#62

Post by tombert »

0x3f wrote: post #60
tombert wrote: post #57

Earlier quoted context omitted.

Yeah, maybe a bad example on my end. Still, I just find the idea of turning everything in politics into a casino kind of gross. Taken to the extreme it can get pretty disgusting. Like, imagine that there were a Polymarket of "Will COVID deaths break 1 million?" or "Will Take His Fifth Victim?". These are hyperbolic examples and I'm not saying that anything on Polymarket is that bad, but even the stuff that's currentl…

The market already bets on war and death, and has done for probably centuries, only it's mostly institutional players. Seems to me Polymarket just democratizes that, both for bettors and potentially consumers of the probabilities. I would say the average person is terrible at aggregating media and making predictions, at least this way they can access expert opinion for free. Of course as yet it's still niche nerd stu…

I don't like it when governments and military contractors and billionaires gamble with human lives either.

Even if you can derive some utility out of the metrics doesn't mean it's good. One can find silver linings in many illegal things but that doesn't imply that it should be legal.

Re: Uncovering insiders and alpha on Polymarket with AI

#63

Post by smcin »

kibwen wrote: post #45
smcin wrote: post #33

Earlier quoted context omitted.

You're overlooking that sudden, unexplained or counterintuitive movements in the actual prediction market itself, well before the event occurs/market resolves can themselves convey information, about what apparent insiders think (or whales want to manipulate the market to think). Obvious example: Polymarket now has 69(!) markets involving Iran: https://polymarket.com/predictions/iran Consider the timing of those mark…

> movements in the actual prediction market itself, well before the event occurs/market resolves can themselves convey information, about what apparent insiders think (or whales want to manipulate the market to think) Yes, and surely you see that the inability to distinguish between true signal and deliberate countersignal until after the bet has resolved is an indictment of the very model of predictions markets. Lik…

If you can see which account placed key trades, you can determine if it's likely to be signal/countersignal/neither.

Certainly the platform itself can.

Re: Uncovering insiders and alpha on Polymarket with AI

#64

Post by 0x3f »

tombert wrote: post #62
0x3f wrote: post #60

Earlier quoted context omitted.

The market already bets on war and death, and has done for probably centuries, only it's mostly institutional players. Seems to me Polymarket just democratizes that, both for bettors and potentially consumers of the probabilities. I would say the average person is terrible at aggregating media and making predictions, at least this way they can access expert opinion for free. Of course as yet it's still niche nerd stu…

I don't like it when governments and military contractors and billionaires gamble with human lives either. Even if you can derive some utility out of the metrics doesn't mean it's good. One can find silver linings in many illegal things but that doesn't imply that it should be legal.

It's not only those groups though, for example a stable food supply requires an efficient commodities market. The utility is not just marginal.

Re: Uncovering insiders and alpha on Polymarket with AI

#65

Post by skybrian »

testaccount28 wrote: post #38
coldtea wrote: post #36

> Prediction markets have been called "truth machines" because anyone who has information missing from the market can profit. That sounds like "insider trading" machines, or "scam" machines, rather than truth machines.

yes, they allow you to pay people who have information about the future for that information, in a distributed manner. this is great if, like many people, you want information about the future.

The prediction market itself is a ouija board. You're given a number. You don't know who's moving the needle or why. You don't know what you're paying for. Maybe you're paying for information from people who are breaking someone's trust by giving it to you? Or maybe you're paying them to make it happen?

Although, sometimes a market provides incentive to publish information that's associated with the market being influenced. For example, someone can do an investigation, short the stock, then publish it.

Re: Uncovering insiders and alpha on Polymarket with AI

#66

Post by ggggffggggg »

throwaway-99482 wrote: post #61
syntaxing wrote: post #8

Isn’t this the motivation behind polymarket? To incentivize those that have information to bet as a signal of “truth”. What I don’t get is why would anyone bet on this stuff that don’t have insider information besides those with gambling addiction.

It is for people like me. I'm usually right about things before other people even know about them. Bought BTC in 2011, ETH in 2014 (funded the IPO), Tesla in 2013, Microsoft right when they replaced Ballmer (at $30 I think), Nvidia on the Covid crash day in 2020, learned Rust in 2017, took AI seriously two weeks after ChatGPT 3.5 launched. I never had any insider information. I typically have a good feeling for thing…

But “making lots of bets” is a measure of your appetite for risk, not your acumen. So unless you are filthy rich (in which case, kudos!) I think you are more proving parent’s point.

Re: Uncovering insiders and alpha on Polymarket with AI

#67

Post by lukev »

jstanley wrote: post #55
tester756 wrote: post #47

Earlier quoted context omitted.

That sounds cool and fancy in theory, but how do you find that information among the noise? like if 50 ppl vote A, 45 people vote B and 1 person who actually knows their shit votes B? How do you find it? By amount?

Because the people who are consistently right will consistently win money and will make bigger bets which move the price more, in the limit case making the price converge on the true probability of the outcome. This is the theoretical underpinning of prediction markets.

Equating being "consistently right" with having a sufficiently large stash of capital is ludicrous.

"right" people will wisely take most their winnings out of a high-variance market. "wrong" people with deep pockets (or lots of wrong people with shallow pockets) will continue to distort the market.

Re: Uncovering insiders and alpha on Polymarket with AI

#68

Post by SauntSolaire »

lukev wrote: post #67
jstanley wrote: post #55

Earlier quoted context omitted.

Because the people who are consistently right will consistently win money and will make bigger bets which move the price more, in the limit case making the price converge on the true probability of the outcome. This is the theoretical underpinning of prediction markets.

Equating being "consistently right" with having a sufficiently large stash of capital is ludicrous. "right" people will wisely take most their winnings out of a high-variance market. "wrong" people with deep pockets (or lots of wrong people with shallow pockets) will continue to distort the market.

Well, the more often you're right, the more capital you will be able to accrue to bet with next time.

Re: Uncovering insiders and alpha on Polymarket with AI

#69

Post by chii »

0x3f wrote: post #50
jwpapi wrote: post #37

Earlier quoted context omitted.

Why dont you just copy the trades?

If I'm an insider with 100% confidence, I'll take all offers at a certain price as long as I can afford it. Similar story for lower levels of confidence (but still inside info). There won't necessarily be any left for you to copy at a viable price.

> Similar story for lower levels of confidence

therefore, the polymarket betting odds will reflect the truth - even if that info is a secret that nobody else but the insider knows. And if this is the case, then even an outsider could make use of the odds as a source of info which would ensure that market efficiency (which is about the flow of information) is high.

So what's wrong with insider trading again?

Re: Uncovering insiders and alpha on Polymarket with AI

#70

Post by chii »

skybrian wrote: post #65
testaccount28 wrote: post #38

Earlier quoted context omitted.

yes, they allow you to pay people who have information about the future for that information, in a distributed manner. this is great if, like many people, you want information about the future.

The prediction market itself is a ouija board. You're given a number. You don't know who's moving the needle or why. You don't know what you're paying for. Maybe you're paying for information from people who are breaking someone's trust by giving it to you? Or maybe you're paying them to make it happen? Although, sometimes a market provides incentive to publish information that's associated with the market being infl…

you dont need to pay to access the odds - it's public info.

There are people who pay to make bets on it (if they think the odds are wrong). But you don't have to be a betting participant to access the betting odds. You simply use the betting odds as a prediction of a future outcome, and you take your action/planning accordingly.

Post reply on HN