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.
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.
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'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.
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!)
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.
> 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.
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.
Indeed. For those of us not gambling, it's really quite beneficial.
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.
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.
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’s a gambling site. The motivation behind it is to make money through transaction fees. You can bet on sports games too.
Because taking high variance slightly negative EV shots is not a terrible strategy when you have a long time horizon.
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.
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!)
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.
Not sure why the dumb money keeps playing. If you're not the insider the person you're trading against is.
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.
"the dumb money"