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ELI5: how market making works in event prediction? I logged in into Kalshi and I only yes/no ossible answers with two probabilities associated. Their page on ma
by wslh 2y ago
ELI5: how market making works in event prediction? I logged in into Kalshi and I only yes/no ossible answers with two probabilities associated. Their page on market making doesn't explain it [1].
[1] https://help.kalshi.com/faq/what-is-the-market-maker-program https://help.kalshi.com/faq/what-is-the-market-maker-program
- andes314 2y agoYou treat a single side (yes or no) as a contract and do it as you would any other security. The difference here is you can hold “negative” stock which is stock in the opposite side. To reduce inventory risk you adjust your willingness to sell/buy so you’re always hovering around zero.