2 ms·
super interesting, re: spending money to move the line is just another form of non-profit-seeking "consumption." i didn't filter for manipulation specifically,
by jonbecker 8mo ago
super interesting, re: spending money to move the line is just another form of non-profit-seeking "consumption."
i didn't filter for manipulation specifically, but i did find that politics was actually one of the most efficient categories (only ~1% maker/taker gap), suggesting the market absorbs those flows pretty well.
- jpmattia 8mo ago> but i did find that politics was actually one of the most efficient categories (only ~1% maker/taker gap) I confess I'm surprised by that result in particular. I realize your results are for Kalshi, but ISTR some reports from the presidential elections on Polymarket. But more generally: When you say there is "only a ~1% maker/taker gap", is that weighted by the size of the bets? or is it averaged over the number of bets placed? In any case: Thanks for a very interesting paper!
- jonbecker 8mo agoIf we weight by contracts purchased the gap is 1.02%, dollar weighted the gap is 1.00%. I'm glad you enjoyed the paper :)
- jpmattia 8mo ago[I'm still thinking about this a day later!] I think an additional table/graph of how large-bet performance vs small-bet performance would be interesting in general, as well as broken out by market type. It kinda answers of the question: Are large bets equal to smart money? or are they equal in "smartness" to small bets?