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I've heard people say this but it really only makes sense if you don't think about it for more than 10 or 20 seconds. Prediction markets by definition always r

by pc86 7mo ago

I've heard people say this but it really only makes sense if you don't think about it for more than 10 or 20 seconds. Prediction markets by definition always resolve to one side being completely wiped out and losing everything. Stocks going to zero happens pretty seldomly, in prediction markets it's guaranteed to happen every single time.

slibhb 7mo ago
That's only true if you leave your money in...which you don't have to do. You can play prediction markets by betting on a swing. E.g. I made a few hundred dollars betting on Harris in 2024 when Trump was at ~65% odds and then selling before the election when it was closer to 50%.
- JumpCrisscross 7mo ago
  > can play prediction markets by betting on a swing The outcomes are still capped. In that respect, it's more like a derivative market than the stock market. You can trade in and out of options. But the value in the system is tightly defined and, after fees, a net negative-sum game.
  - kqr 7mo ago
    There are no fees on Polymarket. Not sure about others.
    - deleted 7mo ago
      [deleted]
    - kasey_junk 7mo ago
      Depends on the event: https://docs.polymarket.com/trading/fees https://docs.polymarket.com/trading/fees
    - JumpCrisscross 7mo ago
      > There are no fees on Polymarket "Currently, small fees apply to Crypto and Sports markets. Starting March 30, 2026, this will expand to include other categories like Finance, Politics, Economics, Culture, Weather, and Tech" [1]. More critically, Polymarket doesn't pay interest on deposits. (Kalshi does.) [1] https://help.polymarket.com/en/articles/13364478-trading-fees https://help.polymarket.com/en/articles/13364478-trading-fee...
      - kqr 7mo ago
        Thanks for the correction! I have to admit it was a while since I last looked into this and I shouldn't have been so confident.
    - barchar 7mo ago
      There is a fee implicit in the market spread. It's formed out of the time value of money w.r.t. the cost of NOT trading as well as the adverse selection faced by those with standing offers. Increased insider trading will increase spreads.
      - hunterpayne 7mo ago
        Then explain why the average prediction market has a smaller spread than the average equity option market.
- barchar 7mo ago
  In that case you limit your upside as well as an insider, and have to deal with liquidity and slippage coming and going.
losvedir 7mo ago
So options markets then?
hunterpayne 7mo ago
Prediction markets are not binary options. They are closer to a liquid equity option market (and most equity option markets aren't liquid at all). That means you can trade into and out of positions at any time and for different prices depending on where the market is. You can even do time spreads where you can't lose it all no matter what happens. Maybe your 10 or 20 seconds of thinking wasn't as perfect as you think since you don't seem to understand how prediction markets actually work.

by pc86 7mo ago

slibhb 7mo ago

That's only true if you leave your money in...which you don't have to do. You can play prediction markets by betting on a swing. E.g. I made a few hundred dollars betting on Harris in 2024 when Trump was at ~65% odds and then selling before the election when it was closer to 50%.

JumpCrisscross 7mo ago
> can play prediction markets by betting on a swing The outcomes are still capped. In that respect, it's more like a derivative market than the stock market. You can trade in and out of options. But the value in the system is tightly defined and, after fees, a net negative-sum game.
- kqr 7mo ago
  There are no fees on Polymarket. Not sure about others.
  - deleted 7mo ago
    [deleted]
  - kasey_junk 7mo ago
    Depends on the event: https://docs.polymarket.com/trading/fees https://docs.polymarket.com/trading/fees
  - JumpCrisscross 7mo ago
    > There are no fees on Polymarket "Currently, small fees apply to Crypto and Sports markets. Starting March 30, 2026, this will expand to include other categories like Finance, Politics, Economics, Culture, Weather, and Tech" [1]. More critically, Polymarket doesn't pay interest on deposits. (Kalshi does.) [1] https://help.polymarket.com/en/articles/13364478-trading-fees https://help.polymarket.com/en/articles/13364478-trading-fee...
    - kqr 7mo ago
      Thanks for the correction! I have to admit it was a while since I last looked into this and I shouldn't have been so confident.
  - barchar 7mo ago
    There is a fee implicit in the market spread. It's formed out of the time value of money w.r.t. the cost of NOT trading as well as the adverse selection faced by those with standing offers. Increased insider trading will increase spreads.
    - hunterpayne 7mo ago
      Then explain why the average prediction market has a smaller spread than the average equity option market.
barchar 7mo ago
In that case you limit your upside as well as an insider, and have to deal with liquidity and slippage coming and going.

losvedir 7mo ago

So options markets then?

hunterpayne 7mo ago

Prediction markets are not binary options. They are closer to a liquid equity option market (and most equity option markets aren't liquid at all). That means you can trade into and out of positions at any time and for different prices depending on where the market is. You can even do time spreads where you can't lose it all no matter what happens. Maybe your 10 or 20 seconds of thinking wasn't as perfect as you think since you don't seem to understand how prediction markets actually work.