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It's a bad analogy because the incentives are totally different. With sports betting (of the type in the article) you're betting against the bookmaker. If you w
by jbstack 9mo ago
It's a bad analogy because the incentives are totally different. With sports betting (of the type in the article) you're betting against the bookmaker. If you win, they lose, and vice versa. Obviously it's better for them that you lose.
With financial markets you are betting against other users. The ones running the market take fees on each transaction, so they don't care whether you win or lose. Their incentive is just to keep you making transactions.
- wbshaw 9mo agoI always understood bookmaking as the house making money on the vig. They don't care who wins or loses. They just want to make sure there's an equal number and they take their percentage off the top of all the bets. Too many people betting the over? Move the line.
- pama 9mo agoThe article explains that there are other betting systems/organizations where you bet against the house, especially in early times of a new type of bet, before there is market information. These organizations try to eliminate/reduce the power of intelligent players. In financial markets the function of the house is done by market makers. You could technically burn down a market maker with superior intellect and a deep bankroll, but they generally have very deep pockets and make money at a fast rate to weather the storms.
- ekjhgkejhgk 9mo ago> With financial markets you are betting against other users. Learn what a "broker" is.
- quickthrowman 9mo agoA book maker and market maker offer the same service: liquidity. The only difference is the market they offer liquidity in.