4 ms·
Not knowing who are the insiders and who is the dumb flow is like the fundamental problem of hft
by andrepd 6mo ago
Not knowing who are the insiders and who is the dumb flow is like the fundamental problem of hft
- deleted 6mo ago[deleted]
- 3eb7988a1663 6mo agoHow is there enough volume to cover the other side of the bet with these minutes-before trades?
- andrepd 6mo agoThe oil market is, to put it mildly, fucking huge
- 3eb7988a1663 6mo agoFor sure, the real trading markets are huge. I mean the betting platforms.
- huorricannes 6mo agothe betting markets offset positions with the real markets. it's all connected
- JumpCrisscross 6mo ago> betting markets offset positions with the real markets Need a strong source for this. The size (and regulatory) disconnect between the two would seem to make making markets in both a bit silly.
- OutOfHere 6mo agoAre you implying that there is arbitrage between the prediction market and the real market? Until now we were assuming that the prediction market is self-contained, with its other side staying within the confines of the prediction market.
- huorricannes 6mo agothe other side can and many times is an arbitrageour which has positions in both the prediction market and the real market
- JumpCrisscross 6mo ago> oil market is, to put it mildly, fucking huge Sure. But these aren't trades in "the oil market." They're bets on Polymarket and a specific oil-futures exchange.
- iknowSFR 6mo agoYou can trade on non-public information if you obtain that information unintentionally. Now you have to be able to prove it’s unintentional if the question came up. A real experience example of this is if you work in an office building and your neighboring company, a public company, is being raided by the FBI. Can you use that information to take a position in the market? Yes, according to multiple attorneys we spoke with. I bring this up because we assume the trading is coming from insiders but I wonder if the parties behind this have baked in a layer similar to my story above. To close this back to your comment, and I don’t have an answer here: is knowing who the insiders are and acting on that a crime? If you did know and didn’t report them, are you breaking a law? Or worse, you reported it to the deaf ears of a regulator that are focused elsewhere or are under resourced to respond now?
- huorricannes 6mo agointentionally/unintentionally is not relevant. it's legal to follow FBI cars and see who they raid so as to make trades. you could even have a hedge fund specialized on this. it's called alternative data you can even be a regular employer of a public company and trade based on information sent on internal emails. the only thing illegal is to be a designated insider - typically a restricted group of people with access to sensitive information
- JumpCrisscross 6mo ago> you can even be a regular employer of a public company and trade based on information sent on internal emails You absolutely cannot.
- Supermancho 6mo ago"cannot" here meaning it's likely to be prosecuted, not that you cannot. You absolutely can.
- deleted 6mo ago[deleted]
- cout 6mo agoIn theory that is part of what was supposed to have been solved by CAT.
- phrygian 6mo agoWhat is CAT?
- paulpauper 6mo agoinsiders would presumably be bigger trades that show high conviction about improbable events. An insider would wait until the last minute to take advantage of low prices of a market close to expiration.