[HN Gopher] Uncovering insiders and alpha on Polymarket with AI
___________________________________________________________________
Uncovering insiders and alpha on Polymarket with AI
Author : somerandomness
Score : 110 points
Date : 2026-02-20 18:11 UTC (1 days ago)
(HTM) web link (twitter.com)
(TXT) w3m dump (twitter.com)
| ralph84 wrote:
| Not sure why the dumb money keeps playing. If you're not the
| insider the person you're trading against is.
| taylorius wrote:
| "the dumb money"
| doomslayer999 wrote:
| Because its an event contract with a defined upside/downside
| and time horizon. You know exactly what you stand to lose and
| gain and when. Makes it a valuable part of some intricate
| financial strategies.
| tokenless wrote:
| Plus casinos exist. Why do people play blackjack.
| pocksuppet wrote:
| Because you think you can predict the probability of the
| insider insidering each way and place a bet before they insider
| delichon wrote:
| > Clearly, these insiders have figured out a way to cash in on
| information. Whether that's kosher is out-of-scope here
|
| To the extent that the value of prediction markets is in their
| power to predict, insider trading is kosher. Wholesome even.
| moduspol wrote:
| Indeed. For those of us not gambling, it's really quite
| beneficial.
| kibwen wrote:
| Prediction markets can only pay out based on public
| information, which means that prediction markets can only
| "reveal information" like this for things that would have
| been public knowledge anyway. And insiders are always risking
| that leaking their insider info might influence the outcome
| of the bet against them (like if leaking the date of a covert
| military operation causes the operation to be rescheduled),
| so they're financially incentivized to wait as long as
| possible before tacitly revealing that information. So
| prediction markets are the worst possible way of revealing
| hidden information: you will only learn about things you
| would have already known, and only when it's too late to make
| any use of that knowledge.
| moduspol wrote:
| There's also a financial incentive to get your bets in
| early, while the odds are still in your favor. The longer
| you wait, the higher the risk that your secret becomes
| public knowledge.
|
| I agree it's not perfect, but I think you're underplaying a
| lot of the value.
| smcin wrote:
| 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 markets wrt 2026 national
| elections in US, Israel, also Sweden, legislative elections
| in France, Germany (as canaries for their next general
| elections) plus a possible change in UK PM, plus any
| possible Ukraine or Venezuela outcomes. And of course
| events in the stock market or energy markets make certain
| outcomes more/less likely.
|
| Also, on Polymarket traders often buy and sell before a
| market resolves, to exploit patterns in other traders.
|
| And consider what happens at major media e.g. CNN now
| they've partnered with Kalshi, wrt whether the broadcasting
| certain predictions/viewpoints/interviewees get
| boosted/suppressed.
| kibwen wrote:
| _> 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. Like a qubit, you must
| collapse the waveform to extract the information.
| smcin wrote:
| 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.
| tedsanders wrote:
| Bribing employees to disclose confidential information
| entrusted to them is not kosher nor wholesome. I consider
| corporate insider trading on these markets to be analogous - if
| you're an employee and you trade, you are selling your
| employer's info for money. Nearly every employer would fire
| employees caught giving away confidential information for
| personal bribes.
|
| In the stock market, Matt Levine likes to say that insider
| training is about theft, not fairness. You can be prosecuted
| for merely sharing info with a friend on a golf course who then
| proceeds to trade. Your crime is not trading (you didn't even
| trade), but misappropriating information you were entrusted
| with and not authorized to sell.
| pousada wrote:
| The market economy is not about fairness but about ruthless
| power.
|
| The worlds most influential people demonstrate that only
| power matters; that the world order we built last century
| through unimaginable suffering and violence matters less than
| securing their own personal gain; that law, morals, and order
| were just dreams of the weak
| PollardsRho wrote:
| What about bets without insider participation, where you want
| the market to function as an aggregator of educated guesses? OP
| has one reaction to insider trading, but I imagine a very
| common alternative would be "those insiders make their money
| off of bettors like me, I shouldn't participate." Some
| questions are clearly insider-proof, but I imagine many
| questions have insiders who don't bet on Polymarket. If
| Polymarket is going to be a good prediction market, surely it
| should incentivize people to make predictions on those
| questions too?
| empath75 wrote:
| It's not that it's cheating _in the market_, but if people have
| an obligation to their employers, etc, to keep information
| confidential, then they are stealing from their employer by
| cashing in on it, as sure as if they had taken money from the
| till.
| bstsb wrote:
| iirc polymarket doesn't explicitly rule against this, and neither
| does the law. prediction trading like this operates as
| "commodities" trading, so they have no obligation to prevent
| this, and indeed they have an financial incentive to let it
| continue (assuming others don't leave the platform!)
| aleksiy123 wrote:
| I would go even further and say that it's a vital part of
| prediction markets as the intended theoretical goal is accuracy
| of predictions.
| BoxFour wrote:
| > neither does the law
|
| I don't think that's right. Prediction markets fall under CFTC
| oversight, and the CFTC absolutely has insider trading rules.
| We just haven't seen any enforcement yet. Partly because the
| space is still new, and partly because enforcement priorities
| have been uneven lately (to put it mildly).
|
| The CFTC has already signaled it's starting to look more
| closely at insider trading in prediction markets. It's almost
| certainly just a matter of time. It's pretty likely a future
| administration will clamp down on this, if the current one
| doesn't.
| syntaxing wrote:
| 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.
| carefree-bob wrote:
| It's not just a gambling addiction, but many people consider
| themselves smarter than the average person, and nature's way of
| punishing these people is creating things like stock markets
| and polymarkets.
| doomslayer999 wrote:
| Because taking high variance slightly negative EV shots is not
| a terrible strategy when you have a long time horizon.
| conformist wrote:
| By "not terrible" you mean "bad but not very bad" and not
| "good" right?
| kibwen wrote:
| "High variance, slightly-negative EV shots on a long time
| horizon" is a gambling addict's way of justifying the old
| adage, "sure, we're losing money on each sale, but we'll
| make up for it in volume!"
| tyre wrote:
| this is the "lose money on every sale but make it up on
| scale" version for gamblers and I love that for you.
| doomslayer999 wrote:
| Definitely not. It's more like either winning a 1B B2B
| contract or going bankrupt. Like I said above you don't
| want to scale up taking high variance shots because it will
| reduce variance and converge towards the mean
| c22 wrote:
| I feel like the longer your time horizon the worse -ev games
| are for you?
|
| I bought one lottery ticket, I don't think my odds are gonna
| get any better than that.
| doomslayer999 wrote:
| To be clear, I meant the opposite. I meant that if you take
| a high variance swing and you lose, you have capped
| downside, so you can rebuild and recover hard long term.
| Conversely if you win you have a huge head start and can
| deploy the capital quickly.
|
| Of course you DONT want to repeatedly take -EV bets. That
| would reduce variance and converge you to the mean which is
| negative by the central limit theorem.
| kylestanfield wrote:
| It's a gambling site. The motivation behind it is to make money
| through transaction fees. You can bet on sports games too.
| peterjliu wrote:
| Some people have better data, like insiders.
|
| Some have better models that predict with higher accuracy,
| given the same data.
| conformist wrote:
| There's also a vague argument around hedging some actual risks
| that some market participants genuinely want to hedge... which
| depends a lot on the specific bet. Eg hedging exposure to
| specific political events, wars or even company announcements
| can be relevant and worth a premium for non-insiders. Where
| there's a premium to be collected there are speculators to do
| so.
| throwaway-99482 wrote:
| 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.
| ggggffggggg wrote:
| 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.
| wqaatwt wrote:
| > learned Rust in 2017
|
| Seems more like a hobby activity than a decision that would
| lead to any practically meaningful outcome. Since as you
| said, you were already a billionaire in 2017 any money you
| could make by writing software yourself seems insignificant
| nubg wrote:
| He even created this channel 5 years ago just for this post.
| Teach, me bro.
| fatherwavelet wrote:
| You are just such a genius. We all stand in awe. Thank you
| for letting me be in the presence of such towering intellect.
|
| Some might even say Dirac like but I so NO, this simply does
| not go far enough.
|
| I will remember this moment for the remainder of my life.
| Thank you.
| aleksiy123 wrote:
| Out of curiosity, is it possible to see everyone's bets and
| positions in real time?
|
| Or is the info only available later?
|
| I'm guessing that bots predicting insiders and copying positions
| is already a thing.
| SamPatt wrote:
| You can see when they buy or sell a position. It's on the
| blockchain so it's all public. And yes, copying positions is
| called copy-trading and it's extremely popular.
|
| Orders aren't public though. Only the actual trades. This is
| important because by the time the trade is known by others very
| often the edge is gone. Especially if you have other people
| watching the same trader and they all try to copy the trade at
| the same time.
| swingboy wrote:
| If it takes so long for the actual trades to show up then why
| is copy-trading popular?
| 0x3f wrote:
| Not all strategies are low-latency, so you can copy trade
| someone with a buy and hold approach. For example someone
| you think is an insider or whale who might influence the
| outcome.
| nubg wrote:
| Could the "trend-setter" not just buy, sell, buy, sell and
| own everybody who moves after him?
| currymj wrote:
| there is some inevitable "insider trading" in commodities
| markets. for example if you're a giant agricultural company, and
| you want to hedge the price of soybeans, you have some extremely
| relevant insider information about the soybean market. but you're
| still allowed to trade soybean futures. very different than
| securities.
|
| if prediction market contracts really are regulated as
| commodities, then presumably a lot of insider trading must be
| legal, although there must be limits of one kind or another and
| probably if you do something really egregious you might be
| prosecuted under some legal theory.
| joncooper wrote:
| An agricultural company hedging the price of soybeans is
| precisely hedging, not speculation. The insider information
| they have is their supply/demand/pricing picture. That's
| different than the colloquial definition of insider information
| which I've always taken to tie to event occurrence (or not).
| hansvm wrote:
| Why not both? They also have insider information and aren't
| required to limit their trades to those which would hedge the
| crops.
| conformist wrote:
| > "Hedge funds invest a ton in "alternative data", like credit
| card transaction data or satellite-imagery (are Walmart's parking
| lots full?) and need to process as much relevant information as
| possible to make predictions that are relevant to investments. "
|
| Ah yes the famous credit card data and Walmart parking lots
| example that hedge funds were giving a few years ago in every
| interview and news article. Safe to assume that specifically
| these data sets are not what you should look at to make money.
| w10-1 wrote:
| Speculation and concern from a naive observer:
|
| Is it polymarket presenting this ability to detect insiders? Or
| is someone trying to sell the service of detecting insiders to
| those wanting to know if bets are on equal footing? (or wanting
| to follow insiders? or wanting to hide your identity by making
| multiple accounts? Are there per-account fees, when polymarket
| might encourage people to make multiple accounts?)
|
| Regardless, polymarket seems to be on balance corrupting, by
| monetizing and normalizing use of inside information, which
| violates agency principles. It's not clear that it really offers
| hedging or predictive benefits.
|
| When trading firms do better (after data discovery and analysis),
| there's some evidence they're better than other firms, and you
| can trust them with some money. But when there's a public
| prediction market, the only benefit is to the insiders.
| _alternator_ wrote:
| This is largely the classical objection to prediction markets.
| But prediction markets do have value to outside of the markets
| because people want to know the future.
| peterjliu wrote:
| Post author here: To clarify, this is not a post from
| Polymarket.
|
| This is talking about using Compound AI (product I'm working
| on) to query Polymarket data, including finding insiders, just
| as a fun example analysis you could do.
|
| Often you need a well-calibrated probability of a future event
| to feed into some other analysis, and Polymarket is pretty
| great for that. An example is how much insurance (hedge) to buy
| for some disastrous event.
| jwpapi wrote:
| Why dont you just copy the trades?
| genidoi wrote:
| Past performance is not an indicator of future performance.
| kylecazar wrote:
| Shouldn't it be if you suspect they are executed by an
| insider?
| genidoi wrote:
| You can't be sure that they are an insider or lucky, just
| from onchain data.
| bergen wrote:
| If they make single market predictions with high accuracy
| it is very very likely they are
| genidoi wrote:
| No vigilant insider is making a series of "single market
| predictions with high accuracy" on the same account. They
| would make unlinkable bets on fresh accounts.
| BoxFour wrote:
| > No vigilant insider is making a series of "single
| market predictions with high accuracy" on the same
| account.
|
| There seem to be quite a few non-vigilant insiders.
| That's the very premise of the post we're discussing.
|
| This is unsurprising to anyone who's seen the various
| ways people get busted for insider trading in equities.
| meetingthrower wrote:
| Also insider trading is A-OK on prediction markets!
| 0x3f wrote:
| 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.
| chii wrote:
| > 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?
| wqaatwt wrote:
| That someone with inside information will e.g. make 500%
| while those late to the party e.g. only get 10%? (of
| course your example is not very realistic to begin with)
| nubg wrote:
| So is any kind of business illegal? Making investments?
| jwpapi wrote:
| The examples didn't look like they've completely emptied
| the orderbook
| 0x3f wrote:
| Because there's always some uncertainty and capital
| limits. But the uncertainty about the outcome is itself
| inside info, and that's compounded with your own
| uncertainty about the insider as a copy trader. So the
| insider will empty out certain price levels only, and
| your certainty is strictly less than theirs, meaning you
| have even fewer viable levels to buy.
| raincole wrote:
| I think you might misunderstand the value preposition.
| Polymarket _wants_ insider trading. That 's the whole point.
| They'll eventually cave in to PR pressure and deviate from the
| original purpose, though.
| tombert wrote:
| It baffles me that Polymarket is legal.
|
| Even if there wasn't any kind of insider betting going on, it
| just seems so disgusting to turn literally _everything_ into a
| casino.
|
| There's a bet going on right now about Jesus coming back before
| 2027 [1], and a part of me wants to do it because I'm pretty
| confident Jesus isn't coming back by the end of the year (or any
| year), but it seems kind of wrong to try and extract money out of
| people who are gambling away their money.
|
| [1] https://polymarket.com/event/will-jesus-christ-return-
| before...
| 0x3f wrote:
| Polymarket's legality has not yet been tested in many places,
| although I don't personally object to it being legal, there's a
| chance it might not be.
|
| Also, I'd advise against betting on the Jesus market. You can't
| actually read the price as a probability here due to time value
| of money, opportunity cost, etc. So you'd lose money (or at
| best, gain nothing) by betting against it. It's priced
| correctly.
| tombert wrote:
| > Also, I'd advise against betting on the Jesus market. You
| can't actually read the price as a probability here due to
| time value of money, opportunity cost, etc. So you'd lose
| money (or at best, gain nothing) by betting against it. It's
| priced correctly.
|
| Yeah, and assuming Jesus doesn't come back that's only about
| a 3.6% return rate, which is what Treasury Bills are getting
| right now [1]. At that point I might as well do that and
| avoid paying state tax on my interest.
|
| [1] https://home.treasury.gov/resource-center/data-chart-
| center/...
| 0x3f wrote:
| Exactly, the existence of alternatives is mostly what keeps
| the price non-zero. I think counterparties who are actually
| betting on Jesus returning will be quite rare. So I
| wouldn't feel bad about taking money from saps, more about
| just getting a bad rate of return for yourself.
| tombert wrote:
| 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 <Insert Serial Killer>
| 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 currently on there right now like "Khamenei out
| as Supreme Leader of Iran by March 31?" [1] or "Israel
| strikes Iran by February 28, 2026?" [2] seems kind of
| crass. These are real issues that have real consequences
| that affect many real humans (who are no less valuable
| than me) and people are treating this shit like a fucking
| game.
|
| I'm not accusing you of that, to be clear, it's just why
| I find Polymarket to be gross and I'm not sure it should
| be legal.
|
| [1] https://polymarket.com/event/khamenei-out-as-supreme-
| leader-...
|
| [2] https://polymarket.com/event/israel-strikes-iran-by-
| february...
| 0x3f wrote:
| 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 stuff but if I
| were in Iran, I'd probably find a signal about imminent
| strikes or future regime change quite useful.
| tombert wrote:
| 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.
| 0x3f wrote:
| It's not only those groups though, for example a stable
| food supply requires an efficient commodities market. The
| utility is not just marginal.
| names_are_hard wrote:
| I'm in Israel. If you turn on the TV lately, you will
| inevitably hear a bunch of talking heads endlessly
| analyzing every word Trump said, and the movement of
| various US military apparatus, and then sharing "expert"
| insights into when there's going to be an escalation.
|
| I can't do anything about this, except decide when it's
| time to pack my go-bag and leave it near the door so I'm
| ready to go to the bomb shelter in middle of the night.
| To that end, polymarket odds are helpful. I'd never bet
| any money myself, of course.
|
| In related news, I read recently that the IDF is
| currently investigating some personnel who evidently made
| money predicting the last Israel-Iran flare up using
| inside information. Naturally this is quite unlawful.
| bryant wrote:
| The returns on [1] seem to be worse than CDs, and with no
| government insurance, so it's not worth it at the current
| payout. But if a religious event spikes the odds, it'll be
| worth taking the other side of this bet.
| tombert wrote:
| Yeah, maybe I could fabricate a Nostradamus quote that
| implies that removing tariffs will spark an apocalypse or
| something.
| coldtea wrote:
| > _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.
| testaccount28 wrote:
| 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.
| coldtea wrote:
| Information about the future without power to do anything
| about it (except bet on it), like is the case for most
| information and most people, is useless.
| testaccount28 wrote:
| surely this criticism applies as well to... any
| information.
| tester756 wrote:
| 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?
| 0x3f wrote:
| Apart from minor effects, the price is the probability. If
| you 'know your shit', you have more confidence and thus bid
| up or down until there are no more counterparties willing
| to accept your price, and thus the price settles at
| approximately the expert/insider probability.
| jstanley wrote:
| 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.
| lukev wrote:
| 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.
| SauntSolaire wrote:
| Well, the more often you're right, the more capital you
| will be able to accrue to bet with next time.
| chii wrote:
| > will continue to distort the market.
|
| they can only do so as long as they have enough capital
| to lose. Because every time they try to move the betting
| markets against the truth, they will simply lose that
| money when the event happens (and turns out they were
| wrong).
|
| So any distortion will merely be temporary. Unless they
| have access to unlimited capital of course - which is not
| true yet for anyone (but the US gov't).
| lukev wrote:
| That only makes sense in a hermetically sealed system,
| which this is very much not.
| krapht wrote:
| Yes, but is this a problem? Haven't most betting markets
| turned out to offer accurate predictions?
| testaccount28 wrote:
| what do you think you're asking?
|
| like any signal, you reflect on it, integrate it into your
| belief, think through the consequences, etc.
|
| we all want mr. delphi to tell us exactly what will happen.
| but without such a friend, we reason under uncertainty.
| markets are one tool we've found to coordinate such
| signals.
|
| would you ask the same of hiring a private investigator, or
| paying for the new york times? there is no authority with
| your interests but yourself; you must choose who to trust.
| FergusArgyll wrote:
| It's not voting, it's a market
| skybrian wrote:
| 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.
| chii wrote:
| 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.
| skybrian wrote:
| Sure, but I meant it in the sense that _someone_ needs to
| lose money or there 's no point in smarter or more well-
| informed people playing. Their profits have to come from
| somewhere.
|
| These could be (a) people who aren't as smart as they
| think they are (b) people who subsidize the market in
| order to get good predictions (c) people who are hedging
| (essentially, buying insurance). Perhaps other
| possibilities.
| chii wrote:
| > the sense that someone needs to lose money
|
| yep, and that's fine because they did so voluntarily.
|
| If there were no stakes on the line, the information in
| the odds will also not have any real meaning.
| skybrian wrote:
| It's good that it's voluntary, but that's not really what
| I'm getting at. People voluntarily spend money in Vegas
| and buy meme coins too.
|
| This doesn't tell us all that much about whether a price
| signal is a valuable source of information. Often, people
| have varied interpretations of what a price movement
| means. The price doesn't tell you how to interpret it.
| The obvious interpretation can be wrong.
| BoorishBears wrote:
| But usually when prediction markets have shown
| interesting predictions, it's by odds taking large swings
| then collapsing to the correct outcome relatively shortly
| before the event right?
|
| I assume because even if you know the future perfectly,
| putting up large lump sums early could cap your upside if
| people take your large sum as a signal (like OP is doing)
|
| As a viewer you can take your own short-term "actions"
| (gambles) outside the market using the brief advanced
| notice I guess, but I'm not sure planning works like
| that.
|
| In other words, what happens to the accuracy of
| prediction markets if we're including the discrete odds
| that occured along the way to the final odds? It's not
| better than random chance or public sentiment for large
| events is it?
| testaccount28 wrote:
| but like, here in the real world, farmers use weather
| derivatives. so the technology works, has a use case, is
| proven.
|
| if your point is that one should not treat the market's
| number as some oracular probability, then... of course i
| agree! there is no such thing. the market provides a
| signal, like any other.
| skybrian wrote:
| Not a farmer, but I believe they use weather derivatives
| to hedge and weather forecasts for predictions? Going
| through markets for weather forecasts is adding a level
| of indirection that generates a noisier signal.
|
| The idea when hedging isn't to win on expected value.
| It's to reduce risk. You're paying the market to provide
| insurance.
|
| As a side effect, insurance does sometimes generate
| interesting data. The insurance industry generates good
| data about life expectancy. But it doesn't tell you when
| you're going to die.
| nodesocket wrote:
| There is 100% insider-trading and manipulation of prediction
| markets. It's absurd some of the markets that are created. The
| most glaring example was this years super bowl halftime show.
| They had markets on songs Bad Bunny would sing, which song he
| would sing first, etc. You're telling me the thousands of people
| who had access to practices and information would not wager on
| this?
| 0x3f wrote:
| You can just stand near the stadium during practice and glean
| this info. I believe people did exactly that.
| yunohn wrote:
| > it's clear prediction markets like Polymarket incentivize
| sharing information
|
| I severely dislike these euphemisms used by prediction market
| enthusiasts. What exactly is the value of information like "most
| searched person on Google in year N"? Creating 10s of options to
| answer this question via gambling on Polymarket/Kalshi does not
| help anyone except their fellow degenerates. Heck, even events
| like "by N date the USA invade country X" also offer no real
| value, except for the insider circle to front run their own
| invasion and profit from it. Even worse, apparently they provide
| anonymity and cover to illegal participants (eg obviously US
| citizens) just like crypto exchanges like Binance did.
|
| I truly question the sanity of those who believe that prediction
| markets are providing a positive force in this world.
| bertil wrote:
| I'm very tempted to agree that those markets are not providing
| a positive force, given the focus on questions for which a
| small group of people know the answer ahead of time. They are
| not sharing that information because it is not in their
| interest, and insiders likely won't have a great time for long.
|
| However, there is large value for some people in knowing when a
| country will be invaded: if you live there, you know when to
| leave; if you are an airline, when to stop scheduling flights
| there, or, if a lot of people are in the first group, up until
| when to schedule many more flights to get them out. But I'm
| positive the invading army would prefer some kid in a basement
| didn't make one Lieutenant General on the committee obscenely
| rich overnight.
|
| I wished the focused on markets where many people are part of
| the decision, like elections. There, the wisdom of the crowds
| would add some value.
| yunohn wrote:
| > there is large value for some people in knowing when a
| country will be invaded
|
| Are there any examples of people/companies trusting
| degenerate gamblers on prediction markets and making real
| life-changing decisions?
|
| All the examples I've seen are exactly what I started in my
| original post - the insider circle opening a massive position
| on the right invasion date mere minutes/hours before they
| actually do it. This is useful to precisely nobody! And it
| happens because they are insiders, who want to avoid risk of
| exposure. Not to share their godly wisdom with the world for
| others benefit.
| FergusArgyll wrote:
| > Are there any examples of people/companies trusting
| degenerate gamblers on prediction markets and making real
| life-changing decisions?
|
| If "real life-changing decisions" includes deciding to take
| a flight based on polymarket placing a low price on war
| breaking out, then yes.
|
| I'd also challenge you to outperform "Degenerate gamblers"
| ttul wrote:
| Trading on non-public information in prediction markets is
| illegal (in the United States) if the information was obtained
| through fraud, deception, a breach of trust--such as compromising
| a position of privilege--or from a confidential government
| source. For example, if you work at Google and know that Gemini 3
| will be released on a certain date, trading on that insight is
| illegal because you are legally misappropriating your employer's
| proprietary information. Furthermore, even if you did not
| personally breach a position of privilege to get the information,
| executing the trade can still be prosecuted as federal wire fraud
| if doing so violates the prediction platform's terms of service.
|
| However, if you trade on prediction markets using insider
| information that was gained WITHOUT fraud, deception, or a breach
| of trust, then so long as the market's terms of service allow it,
| you can go ahead and trade on that information. Polymarket is a
| prime example of this: unlike traditional financial exchanges,
| its Terms of Service do not explicitly forbid everyday users from
| trading on inside information. Instead, the platform relies on a
| catch-all rule prohibiting activity that violates "applicable
| laws." This means that as long as you acquired the inside
| information legally--without hacking, stealing, or breaching a
| duty of confidentiality--Polymarket permits you to capitalize on
| it, treating your informational advantage as a feature that
| ultimately makes the market's odds more accurate.
| nubg wrote:
| Lmao, this user is an AI bot, as he admits in his bio. Frankly,
| the many ellipses gave it away, too.
|
| Edit: He removed the passage.
| seydor wrote:
| In many ways this gambling infatuation is worse than
| cryptocurrency, and with possibly more damaging externalities
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