FR version is available. Content is displayed in original English for accuracy.
Advertisement
Advertisement
⚡ Community Insights
Discussion Sentiment
75% Positive
Analyzed from 1798 words in the discussion.
Trending Topics
#markets#market#prediction#more#money#insider#trading#betting#stocks#bet
Discussion (69 Comments)Read Original on HackerNews
* Polymarket is a bit more transparent with who placed what bet, so it's a good place to go to study winners.
* The most consistent Polymarket winner I saw was placing 95%+ odds many, many times a day.
* Most markets will have a surprisingly small liquidity, so if your edge is just 5% you won't make as much as a 5% edge in the stock market could make you. This is good in that it keeps the biggest fish out, but some big players seem to be using strategies based on holding the most chips.
* Paper trading in Polymarket/Kalshi is very different than paper trading in the stock market, because even a few grand in Polymarket/Kalshi can have a big impact in how other "traders" interact with you. The traditional paper trade validation -> unleash the bot strategy doesn't work. You need to real trade with real money and scale up while watching how the market responds.
EDIT: Bonus learning -- yes the market runs by getting fish into the system. That's why Kalshi is advertising so much, it attracts suckers for the professional to win from, all while Kalshi takes a percentage.
Generally, you're going to lose money - so don't do it.
Myself I was working on finance-adjacent stuff at the time and thought it had educational value. I did OK trading my favorite penny stock but I've had my share of financial misadventures, like I just had to buy $XIV because I wanted to see what happened and... I did.
What failed? Was it too late to follow the trend by the time one was identified or something else? It seems much more transparent than trying to reason about say dark pool trades.
* I only had the example trades in the news as 100% confirmed positive trades.
* There are hundreds of millions of dollars in trades a day in Polymarket.
* In Polymarket you can just spin up a new account. If an account spins up, makes a $50k bet and wins, and then has no other activity, was that an insider trader or just someone with a behavioral pattern of spinning up new accounts? Just following up on these types of trades didn't provide a very big edge, as the nature of the trade adjusts the payout percentage.
I'm pretty conservative in my predictions and just think there is a lot of free money on these sites. Maybe that just supports the sentiments of this article and most of the negative comments on this post.
There are certainly cases where I got run over by the steamroller picking up nickels, but in general that's few and far between. A good example is getting trump losing the 2020 election at 90% after the election in November. If you find those types of markets and compound the earnings it's a pretty nice savings account.
I've also been burned by insider trading and vague rule interpretations but at this point, you chalk it up to the nature of prediction markets. I now try to stay away from markets that are more manipulative (e.g. mention markets).
I don't understand the hostility to prediction markets. There are definitely hedging opportunities and we're all adults.
It’s worse than insider trading as it’s betting that Kyle’s mom will bomb Gaza and then making it happen.
Any societal good from knowing is outweighed by the injustice.
If there was any regulation by government or the markets themselves then it would be better. Betting in things you can’t affect like the weather or earthquakes or elections or whatever is actually pretty useful for awareness.
(also, we allow plenty of zero and negative sum interactions in society. I don't know why this is special.)
The winners, as you point out, are the house and those with insider knowledge.
"Someone allegedly used a hairdryer to rig Polymarket weather bets" https://www.engadget.com/big-tech/someone-allegedly-used-a-h...
Text-only, no Javascript, no CAPTCHA, no DDoS on blog, no geo-blocking, HTTPS optional:
https://assets.msn.com/content/view/v2/Detail/en-in/AA22jnEi...
That's why death pools were supposed to be equivalent to assassination markets. Somebody would kill the person to win.
The only way (I would think) to make money if you're not an insider is to take advantage of the fact that most people believe in the Law of Averages and consistently err to moderation, so they overestimate small chances and underestimate large chances. Just bet with the crowd when the crowd (and reason) is overwhelmingly on one side. That depends on the vig being low enough not to obliterate that little bit of expected profit, though.
Prediction markets fatally suffer from two Problems.
1) large sharks making huge bets at the end (destroying any signal from earlier bets)
2) inside information on poorly written bets.
The solution is parlay style payouts but that destroys popularity (you are paid out at closing odds not at your time of bet odds spread to sell position).
I think you mean parimutuel payouts?
So 25% of users are profitable? That's vastly more than on financial sites - stocks/futures/forex/options trading where only 5% of bettors are profitable.
The majority of active traders won't beat the market (e.g. the S&P 500). That doesn't mean they aren't profitable.
Source? I'm not doubting that there are products and forums where 95% of traders lose money. But that's far from representative for most financial-market participants.
If you're "investing" in a prediction market, you're "investing" because the alternative is going to your local casino, breathing in unholy amounts of cigarette smoke, and getting into a scuffle with a senior gambling their OASDI check over which slot machine you're sitting at.
And that's just not something most tech bro types are interested in. It screams "loser", not "value creation and market disruption wunderkind".