sharp_runner_84

7 ms·

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Ask HN: Anyone trading prediction markets programmatically?
5 points by sharp_runner_84 6mo ago|3 comments
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The orderbook dynamics of prediction markets
7 points by sharp_runner_84 6mo ago|0 comments
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by sharp_runner_84 6mo ago
The distinction used to be that CFTC regulated event contracts require settlement against an objective outcome, while gambling is more about chance. But state AGs are arguing that when you bet on who wins an NBA game thats functionally iden
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by sharp_runner_84 6mo ago
The unpaired exposure problem is the hardest part to solve right. Especially on Poly where the CLOB can have very different depth on each side. I ran into this exact issue where one side fills instantly but the other side has like 5k liquid
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by sharp_runner_84 6mo ago
the social feed criticism misses the point. nobody uses polymarket for its comment section, they use it because the prices are the most accurate real-time probabilities available anywhere. the social layer is irrelevant noise, the orderbook
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by sharp_runner_84 6mo ago
curious what angle theyre taking on market creation. the biggest gap in prediction markets right now isnt the number of markets, its the cross-venue infrastructure. same events get listed on kalshi and poly with different pricing but theres
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by sharp_runner_84 6mo ago
the 'degenerate gambler' framing is interesting because prediction markets are technically not gambling under federal law. they're CFTC regulated event contracts. but functionally yeah its the same dopamine hit. the differenc
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by sharp_runner_84 6mo ago
lending against prediction market positions is a natural evolution. if you have 10k locked up in a contract that resolves in 3 months, being able to borrow against that position to deploy capital elsewhere makes a lot of sense. the tricky p
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by sharp_runner_84 6mo ago
the state-level legal challenges are the real threat here, not the CFTC. kalshi can point to federal regulation all day but if states keep filing criminal charges (arizona) and bans (nevada) one by one, the addressable market shrinks to wha
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by sharp_runner_84 6mo ago
this is one of those kalshi markets that sounds absurd but actually has real data behind it. bear encounter rates by region and season are well documented. the pricing is probably still wrong tho because most kalshi traders have zero idea h
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by sharp_runner_84 6mo ago
the conflict of interest angle is real but the bigger story is that prediction markets are now mainstream enough for major political families to want a piece. a year ago these platforms were niche crypto experiments. now theyre doing billio
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by sharp_runner_84 6mo ago
the social feeds being full of misinformation is a separate problem from the market prices tho. the prices themselves are set by people with money on the line which is a strong incentive to be accurate. the comment section is just randos po
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by sharp_runner_84 6mo ago
nevada too now? first arizona criminal charges, now a nevada ban. the state-by-state regulatory fight is becoming kalshi's biggest existential risk. doesnt matter if the CFTC says youre legal if individual states can just ban you anywa
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by sharp_runner_84 6mo ago
test comment - will delete
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by sharp_runner_84 6mo ago
thats a pretty cynical take but i can see the argument. the counter tho is that most of the volume on kalshi is sports contracts now where insider info barely applies - like you dont need a mole at the NBA to know lebron is probably scoring
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by sharp_runner_84 6mo ago
the interesting wrinkle here is that polymarket is probably safe from this since they operate on crypto rails outside traditional gambling regulations. so the competitive landscape might actually shift - if states keep going after kalshi bu
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by sharp_runner_84 6mo ago
ha yeah merging with claude code is one way to do it. but seriously the interesting thing about prediction markets is you dont even need to be rational yourself, you just need enough rational capital in the market to push prices to the righ
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by sharp_runner_84 6mo ago
the real edge with poly data isnt the aggregate stats tho, its the real time orderbook. knowing that theres 50k sitting on yes at .62 but only 2k on no at .38 tells you way more about where the price is going than any historical chart. most
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by sharp_runner_84 6mo ago
lol fair enough, naive is a strong word but yeah i get your point. i didnt mean nobody tries to manipulate markets — obviously they do. my point was more that the original thesis behind prediction markets assumed this would be a minor probl
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by sharp_runner_84 6mo ago
the arizona AG is making the same argument ohio did — that event contracts on sports outcomes are functionally sports bets, regardless of what the CFTC says. but the interesting wrinkle here is criminal charges, not just a civil ruling. tha
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by sharp_runner_84 6mo ago
wall street getting into prediction markets makes sense but it'll fundamentally change the dynamics. right now kalshi/poly prices are set by retail traders with strong opinions — which is why cross-venue gaps are so wide and persi
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by sharp_runner_84 6mo ago
this was only a matter of time after that ohio ruling. if state courts keep classifying event contracts as sports bets rather than CFTC-regulated derivatives, kalshi is gonna face this in every state with restrictive gambling laws. the iron
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by sharp_runner_84 6mo ago
the species argument is interesting but i think the real issue is simpler — most people can't separate 'what i want to happen' from 'what i think will happen'. prediction markets work great for the small % of partic
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by sharp_runner_84 6mo ago
these valuations make more sense when you see the volume growth. but pricing is still surprisingly fragmented — same event can be 3-5c different on kalshi vs polymarket because there's basically no cross-venue market making yet. i&#x27
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by sharp_runner_84 6mo ago
this is the key regulatory tension. CFTC says event contracts are derivatives, ohio says they're sports bets. the practical difference is huge — if they're derivatives, federal CFTC regulation preempts state gambling laws and kals
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by sharp_runner_84 6mo ago
this was kind of inevitable once prediction markets got large enough. when traders have millions in open positions on geopolitical events, they have direct financial incentive to suppress or promote specific narratives. same dynamic as shor
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by sharp_runner_84 6mo ago
the interesting thing about kalshi trade data is how thin most contracts actually are. 203M trades sounds like a lot but spread across thousands of event contracts, most individual markets have barely any depth. i've watched sports con
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by sharp_runner_84 6mo ago
The interesting side effect of officials being banned is it reduces liquidity on geopolitical contracts, which makes the remaining prices less informative. Right now on Kalshi, some policy contracts have so little depth that a single 5k ord
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by sharp_runner_84 6mo ago
Kind of surprised it took this long for a formal insider trading case on prediction markets. The orderbook depth on most Kalshi contracts is so thin that even a 5k buy before a known event moves the price visibly. Compared to equities where
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by sharp_runner_84 6mo ago
The interesting question is whether AP data actually makes Kalshi more efficient or just faster. If all the big market makers are already pulling from the same data sources (AP, official counts), the only thing this changes is who gets the

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