Say whatever you want about the merits of prediction markets. But I just don't see a way those benefits outweigh the societal dangers of these constant reminders that people in or close to power can freely profit from their positions in the ways the rest of the population can't. There's always talk about the dangers of disincentivizing job creators, but what happens when a society routinely disincentives job havers in this way? We're just getting a constant barrage of information telling us that if we show up to our job and simply work as we're expected that we're stooges who won't get ahead. You'll need to look for your own individual scheme, ethics be damned, if you just want to keep up with the rest of the population. That's not healthy on an individual level or cumulatively at a societal level.
The current setup does sort of seem like a tax on being stupid. Why would any non-insider participate in these markets? Youâre just asking to get screwed.
Though itâs not that different from the stock market, where the folks at WSB happily give their money to Citadel, Jane Street, and friends, because every once a while, one of them hits it big after going all in that the ball lands on green.
Gambling is a hell of a drug and there are good reasons why it is illegal in so many places. Prediction markets have some good externalities (information), but itâs another addictive outlet for those vulnerable to gambling addiction.
As a hedge. Say you own real estate in UAE, and you note that insurance does not cover acts of war. Betting on something like "Iran Bombs Dubai" creates some form of real estate insurance for you.
Even if you suppose my example is bad, you should be able to envision some case where such hedge is helpful.
Yes, but the examples where it's good has a name "insurance". It exists, it's generally well regulated, and is not easily exploited.
The reason it works better is because in a prediction market, the person betting against you has no resources or ability to go after you for fraudulent behavior. Whereas an insurance company has both.
Insurance works on repeatable, predictable risks based on models.
You can't get insurance against a military attack. But you can hedge using a prediction market. It's essentially the version of insurance for one-off events, that relies on wagers since you can't use models.
I'm not saying it's not out there, but in many cases finding insurance for act of war is difficult. It is certainly rare and almost always far less accessible than using polymarket. If you have a very large holding you can probably get someone to write it for you though.
The oil trade structure actually does make sense, because this is how you buy oil, or really any commodity that takes so much space and weight. You order it ahead of time, then if you hold till the contract settles you are allowed to pick it up from the place and in the way designated in the contract specification. In fact you are obliged to pick it up, that's why prices can go negative in exceptional situations. Prediction markets are then just a clean cash-only derivative.
Most of the other prediction markets seems rather stupid to me (they are completely detached from any real world activity), other than their prices being a fairly reliable source of information for bystanders.
>The oil trade structure actually does make sense, because this is how you buy oil, or really any commodity that takes so much space and weight. You order it ahead of time, then if you hold till the contract settles you are allowed to pick it up from the place and in the way designated in the contract specification. In fact you are obliged to pick it up, that's why prices can go negative in exceptional situations. Prediction markets are then just a clean cash-only derivative.
You just described what is happening, you didn't actually provide any reason for why this is good for anyone but the individuals profiting from it.
The point is that's a dubious derivative of a market that makes sense.
As usual, it's a tax on naive and those who get addicted; the twist is that they are willing to pay it, demand and beg to pay it, so providers spring up, legal or not.
> WONG: However, Gerry says most of the major airlines in the U.S. eventually soured on fuel hedging. One reason - the Wall Street transaction fees to make these hedges got expensive.
> WOODS: Plus, Gerry says the airlines found that they could make money the old-fashioned way by raising prices. Today, none of the major airlines in the U.S. are hedging.
Hedging is one of those things that sounds cool but then when your service is x% more expensive than a competitor and you lose customers you just stop doing it. It's kinda like being on AWS; when everybody has an outage together nobody asks "oh what can be done differently".
Is there a name for the phenomenon of when someone provides a single explanation that is so inconsequential that it ends up being counterproductive because surely they would have given a better explanation if one existed?
If your go-to reasoning for why we need prediction markets is so airlines can have more predictability in their fuel costs, you're inadvertently making a solid argument that we don't actually need prediction markets. And this isn't even getting into the other ways these airlines could satisfy the same need.
That still does not satisfactorily answer the question though, why don't they just sign a purchase order with N month lead time? That still gives a well defined price ahead of time.
The people who need the constant price do that, but creating this contract generates an investment at the same time. The person promising the price is taking a premium to take the risk, they can the sell that risk in a free market.
I think the bigger risk is changing major decisions (like war) based on the profitability of bets. Forget about drone war doctrine, if you're an adversary just place absurdly large bets which incentivize the opposition to do what you want. (i.e. bet so you "lose" the bet when the enemy changes their posture to gain the profit).
Politics is already full of these pay to play incentives but now anyone with enough cash can influence world events.
This kind of nation-level hedging has been talked about for years in betting market-aware communities. It's honestly a much better use than fleecing nobodies with insider knowledge.
We should be more worried about who placed the losing bets then. Russia, Israel and China having a market for government and military officials to accept their bribes is kind of a bigger story than insiders fleecing gamblers.
what youâre describing kind of sounds like the wild west or the settlers frontier or the Industrial Revolution, all things that were actually quite beneficial, however in our current environment where everything has been regulated and captured by corporate lobbied legal machinery itâs much worse to have heavy restriction on the masses with the monied upper class able to grease the wheels, if weâre going to have the freedom we need to boom a healthy economy for everyone we need far more wild west from top to bottom
As a foreigner, some view making business with the US as shady in of itself. I usually stand by the US legal system, (which even american citizens might find laughable), but this is by far the most likely reason I would distance myself from doing business.
It helps that some states are bringing criminal charges vs these companies. But it looks like a no contest as to how we'll look back to these kinds of things in 5 years.
Betting on war is war, you may argue that it's an individual's right to participate in war, (I don't think so, I think that it's a war crime for unmarked civilians to participate in war), but funding bellicose action is war.
You'd have to be spectacularly stupid to bet on these kinds of things without having insider knowledge, because you ought to know good and damn well by now that the people with insider knowledge are DEFINITELY betting on them.
This was my thought. If these markets continue allowing insiders, itâll drive all of the cash from regular people away. So there will be way less money for insiders to win even if they are allowed.
So the perception of insiders is pretty bad for prediction markets as a business imo.
The sooner they knock off the rhetoric about the âtheoryâ behind prediction markets and start thinking about it like a business, the sooner they will take insiders seriously.
I think the market could adapt if regular people left. Insider trading would become multilayered and complex. Insiders would scheme against lower-level insiders; decisionmakers would try to trick insiders into thinking that one thing will happen before doing the complete opposite thing. The world would become more erratic and unpredictable, even insiders wouldn't know what is going on.
Although Polymarket is currently spending a lot of money trying to market itself to working-class regular people to get hooked and scam their paychecks out of[0]
A bet against an event is win/win if you want that event to occur. If you are a country that wanted the US to strike Iran, placing a large number of bets that they won't either gets you what you want or earns you money. It is one reason why you can't bet on someone being murdered, as it creates a deniable market to crowd source assassination. Strange that you can crowd source war, but not assassination.
Even if you are not "betting" similar trades are happening in the stock market as well. Large movements in oil futures shortly before policy changes are announced.
Insider trading is at least regulated in the stock market, albeit imperfectly. Imagine how much worse it would be if C-levels could just short their own stock during a board meeting. No one without insider knowledge would touch it.
Matt Levine often says something like "insider trading is not about fairness, it's about theft." The problem isn't that it's less fair to some stock traders than others, and that stock trading should be some form of perfect gambling where everyone has an equal chance of success. Stock trading is inherently about exploiting information asymmetries â that is what all "non-insiders" are trying to do. But insider trading is wrong because it's effectively stealing confidential information from the company & shareholders, which is in violation of & conflict with the fiduciary responsibility that board members, executives, and employees generally have towards shareholders.
Conceptually, I think that is the right analogy to think about. Prediction markets "want" to be a more accurate source of information, just like stock markets, so from that lens "getting" information to be more accurate is good. When government officials are placing bets on prediction markets, though, it's a massive violation of operational security, and leaking confidential information. They probably think that they are acting anonymously, but it creates so many opportunities for unfriendly state actors to get information, especially if people do it consistently.
Apparently, according to you, lots of people are spectularly stupid because the only way you make money in a prediction market is for someone to bet on the opposing view point.
Prediction markets are supposed to be providing the most accurate predictions.
The most accurate predictions come from insider information.
Poeple complaining about insider trading on prediction markets seem to be missing the point. They're supposed to have insider trading. That's the whole idea.
considering the scale involved, and the OSINT trend, is it possible that people could monitor and correlate stuff like airplane, or us navy activity to deduce when to enter ?
I saw a tweet about a trader placing an oil bet when they saw two military aircraft turn around on their way to Iran, via transponder. I believe before the deal was announced.
in fact US army publicly admitting running a disinformation campaign involving flying planes knowing they would be seen by osint in the previous Iran attack from last summer
Do you buy oil or products made with it? Then sorry, you made a bet, and in fact you were just ripped off by your own government for the third time in a row.
Same goes for sport betting and yet here we are.
People like to bet. They willingly bet on things they have guaranteed disadvantage on (casino games like roulette, slots etc.).
People also drink pure poison (alcohol), smoke pure poison (cigarettes) and engage in brain dead activities like speeding and street racing.
Gambling should be judged as any other vice - people get something out of it (rush, hope, whatever) not by rational money allocation standards.
You can trade on non-public information if you obtain that information unintentionally. Now you have to be able to prove itâs 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 donât have an answer here: is knowing who the insiders are and acting on that a crime? If you did know and didnât 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?
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
This interpretation is incredibly unlikely. The first and third paragraphs discuss legality, but the middle one was merely talking about likelihood of prosecution?
Even then it would be inaccurate: the regulators are not too stupid to put two and two together that you work for a company and got incredibly lucky with your trade
To be clear, I was responding about trading on internal communications, not specifically a raid. The practice of using internal communication to guide trading runs contrary to most company policies. I happen to have worked at a company where this kind of practice was both acknowledged and openly discussed. It was a strange place.
> the regulators are not too stupid to put two and two together that you work for a company and got incredibly lucky with your trade
Youâre implying some specific combination of factors, but itâs not clear what you mean. What qualifies as "timing"? Around earnings, when trading volume is highest or just around some event? And what exactly counts as "lucky"?
Why would regulators scrutinize a sub-$25k purchase of my own companyâs stock? That concern feels overstated. Granted, Iâm not a lawyer. In practice I can place a trade at any time. If someone is routinely making $20kâ$30k transactions, that alone is unlikely to trigger scrutiny.
The claim that you "absolutely cannot do this" is simply incorrect. I stand by that.
Are 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.
insiders 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.
But there is still the problem of knowing which new trades the insiders made before the bet is settled (maybe solved by being an insider of the prediction market), and also since prediction markets need money on both sides (you are betting against other people, not the 'house') when the insiders make their buy they probably eat up most of or all of the action on the other side.
Thereâs a recent Patrick Boyle video which puts it aptly: prediction markets are a wealth transfer from retail investors to trading algorithms and people with security clearances.
Anyway, one thing I donât understand yet is how new markets are created. They arenât user generated, so how did an âIran strikeâ market exist to begin with?
> one thing I donât understand yet is how new markets are created. They arenât user generated, so how did an âIran strikeâ market exist to begin with?
Having the US presidents kids as multimillion dollar investors in the platforms and on the advisory board of one them would be a good place to look
Prediction Markets require insider trading to function... how do people not know this? It's a setup from day one. If you have the knowledge, you're going to cash in, if you don't have the knowledge, you are throwing your money away.
> But traders werenât just active on Polymarket: there were similar surges of oil futures trading activity just hours before Trump announced updates to the conflict that would lower oil prices.
Prediction markets are all the buzz, but banning them isnât fixing the problem. This has happened forever. Letâs not forget there was an unusual amount of put option buying right before 9/11: https://ideas.repec.org/a/ucp/jnlbus/v79y2006i4p1703-1726.ht...
If you follow your math, such gambling losers don't really have that much money to bet on an ongoing basis. The ones who support the losing side on prediction markets are the ones who usually do fine, but sometimes are taken by surprise.
Yeah just another Ponzi scheme; one sided extraction with a slight chance of payout that never comes
Stephen Miller and Charlie Kirk were pretty clear their sides whole philosophy is take and never give back. They learned it was OK not from their parents but gen pop sitting on their hands.
The entire economy is Las Vegas now; only the (white) house wins
>Prediction Markets require insider trading to function.
And yet there are folks like me who have been on them for years before kalshi/polymarket making a very good side income from them without having insider knowledge.
Prediction markets as a whole are very very inefficient. That's not to say that insider trading doesn't exist but you can't claim that they require insider trading to function.
Without them talking about how much people LOST, this entire article is meaningless. With the advent of 0DTE options which dominate options trading, the fact that the notional number of people who made money makes sense because so many more people have lost money.
Why wouldnât the platforms require the identity of people cashing out more than, letâs say, $10k a year to be public? Or at least, require KYC level trail to cash out so it can be investigated later.
It protects 99% of people who want to have fun by losing money and prevents insider trading at no virtually no cost.
Because the markets donât âforbidâ anything, especially when they are profiting from it, which polymarket definitely is. Itâs the government who must forbid things for the good of the citizens. But somehow the citizens were dumb enough to fall for the bullshit idea that you should put the same person who is profiting in charge of regulating their own crimes!
Itâs all manipulation and everyone knows it but when the voices are coming from inside the house, whoâs going to investigate? If anything every tech company in the whole flow is going to support and add custom flows for them - âto get on their good sideâ
Thereâs something deeply wrong with the executive branch controlling law enforcement and who gets prosecuted in the US. Jack Smith had him dead to rights in two cases (read the indictments they are water tight) that his attorney general then dismissed. Itâs a travesty. Thank you âlet the courts handle itâ McConnel.
These headlines always irritate me because they use notional value for sensationalism. The 950m notional is if they were paying for a price move of the whole thing from $0 in cash. But these are highly levered futures contracts. And you are getting in and out at 2 price differences that are close to each other.
Itâs still shocking corruption and absolutely should be enraging. But thatâs because itâs a 10s of millions dollar trade. Not a billion dollar one.
How can I evalutate if this is a real issue for cherry picked. Someone won the lotto last week. They must have had insider knowledge! Oh, no, I forgot to look at all the people who didn't pick a winner.
> Sixteen bets made $100,000 each accurately predicting the timing of the US airstrikes against Iran on 27 February
How many bets and for what ammounts were made for other days, or that it wouldn't happen on the 27th?
The standard argument for prediction markets does not include any kind of fairness in gambling. Rather, the point is precisely to surface insider or otherwise well-founded knowledge of the real odds so they can be available to anyone who wishes to look at the price.
(And I do not see how this first-order viewpoint is problematic, precisely. Itâs the second-order consequences of people making the currently-considered-unlikely decision in order to cash in on a bet that I have an issue with.)
Given Trump has promised blanket pardons for any illegality from his administration during his term, I think the question will be whether pardons for crimes not yet investigated/charged are covered by the pardon and whether anyone will pursue those investigations and convictions.
Democrats have historically not really been willing to do anything if there's any plausible sounding reason for doing nothing, so I'm guessing they'll jump at the opportunity to wave away the insider trading stuff. Let bygones be bygones, you know, in the spirit of bipartisanship and comity. They slow-rolled prosecuting the crimes of the first Trump administration. So slow that he was re-elected before anything began to happen.
Unless somebody snitches there's no real way to prosecute insider trading. You can say you just felt like making a trade, or that you read one of Trump's posts the moment he put it up on Truth Social and you just happened to have the trade ready to go.
Unless they're absolute morons, the people doing insider trading for large sums of money will have already built a strong alibi.
> Unless somebody snitches there's no real way to prosecute insider trading. You can say you just felt like making a trade
If you have perfect opsec, sure, you'll just waste a few years and hundreds of thousands of dollars in court. If you texted a friend, or told a friend who then texted a friend, or traded too soon after receiving privileged information, you're probably fucked.
> Unless they're absolute morons
At least in securities, the dirty secret is most insider traders are in Congress and/or morons.
In some nations just gambling on a war that your soldiers have died in would ruin people's careers and possibly their lives permanently as they are shunned by society.
In other nations you can illegally sell arms to Iran in order to illegally evade congress's attempts to stop you supplying money to terrorists, illegally shred evidence and lie to congress under oath about it all and get a job as a pundit on Fox News.
I'm not convinced there won't be someone with a chip on their shoulder eager to snitch. Trump has been known to leave folks out to dry once they're used up (for example, Ruby Giuliani and Mike Lindell). Just today there's been discussion about how Kash Patel feels like he's on the chopping block:
you can say you just felt like making a trade, or that you read one of Trump's posts the moment he put it up on Truth Social and you just happened to have the trade ready to go.
An employee with access to Truth Social's backend can in theory do this by reading the tweets he's writing before he sends them.
As long as the hordes of losers are not bothered by it enough to ask for fairness in the business, youâre right. Ethics and morals are constructs with the intention of creating a better, more just common existence. If the people in this common existence donât care, then there is no reason for them not to do it.
Do you not think that that would have a negative impact on the world? or do you not care, or is this "the world is going to hell so I may as well get mine"?
We all know the president and those close to him are making these bets. The question is are lawmakers willing to collectively take action to stop this practice?
Yet more evidence of the rapid disassembly of the social contract and our collective ethics, aided of course by unregulated tech. If you work for â or are involved in the funding of â these unregulated gambling and insider trading platforms, you should be ashamed of yourself. Your greed and lack of concern for the health of the human world you live in is sickening. You can get bag after bag but it will never fill the void in your soul.
This applies to almost everyone working on SaaS; not in all cases, but the absolute majority work on SaaS means creating artificial scarcity in order to extract value from people. It is a fundamentally evil, antisocial, anti human thing to do. If you believe that is okay to restrict access to infinite resources to preserve the status quo you deserve the same place in hell as the people pushing gambling.
Don't create artificial scarcity. Don't play zero sum games.
> almost everyone working on SaaS; not in all cases, but the absolute majority work on SaaS means creating artificial scarcity in order to extract value from people.
Maybe this is just my lack of understanding in how most SaaS companies operate... But to me making software that people find valuable and charging them for that is not inherently immoral. Surely that is the majority of cases?
> This applies to almost everyone working on SaaS;
The original idea behind SaaS is to align the incentives of the customers and the software company.
Historically software companies made money on selling upgrades. This meant bug fixes were not a priority, and security fixes were something companies got shamed into doing.
SaaS fixes that incentive problem. With reliable ongoing revenue a company can keep software patched and updated and doesn't have to cram a bunch of new shiny marketable features in just to make a huge sale every 3 or 4 years, while engineers try and add whatever bug fixes they can after the shiny new features have been polished off.
It also means software companies don't have boom or bust cycles with hiring. Funding stays consistent, and so does staffing. It makes the financials much easier to manage. Companies used to hire a bunch of temp employees in the run up to a release.
Ongoing release cycles also led to better software engineering practices. More automated tests, reproducible builds, better version control systems, and a lot more things that we take for granted now days.
There are obvious downsides to SaaS as well, but the original idea was good.
This is pseudo-intellectual drivel. Creating value and then charging for it is not creating âartificial scarcityâ, any more than doing nothing is creating âartificial scarcityâ by absence of value. There was no âinfinite resourceâ that just happened to exist before the work was put in to create it. And creating value is - almost by definition - completely orthogonal to zero sum games.
The biggest sums involved appear to be on the oil futures market. That market has existed for a long time (half a century to a century depending on the sophistication you measure). If this is is a novel occurrence it cannot be the platform that 'caused' it.
I think it's just that we create useful tools: futures, the pre-emptive pardon, and so on. Then people figure out how to use those tools to enrich themselves in ways we did not anticipate. It's just a question of how we fix our machinery in this cat and mouse game or if it is fixable at all.
This is the only reasonable point of view to take on the widespread and obviously unethical outbreak of gambling platforms. The fact that it's downboated and towards the bottom is just a reflection of how far the discourse has fallen.
Granted, maybe I should be less surprised given the fact that this is all being posted on the promotional website of a technology-focused private equity fund, but it's disappointing nonetheless.
Insider trading exists with stocks too. I mean, if there is a way for people to profit by bending the rules or information asymmetry, someone will find a way.
Isn't it more than the ability to manipulate global markets essentially means we're headed towards a global inflation crisis? No one with critical thinking skills believe Elon's valuations are a rational market concern.
But if they _are_ rational, eg, a zimbawean inflation nightmare, then if you're not trying to "escape the permanent underclass" then _you_ are the irrational person.
So ignoring all politics, we're really dealing with a zeitgeist of people who think wealth inequality is endless, and the only way to survive is to lobster bucket and YOLO every chance to gamble.
I would be careful about attributing all of this to ordinary insider trading. Another plausible explanation is that some activity could come from state linked or intelligence adjacent actors, where the goal is not only profit but also testing or exploiting prediction markets as an auxiliary information channel.
The most Occam-safe explanation is not insider trading but actually hard work in analytics to rapidly surface intelligence from X and other alternative data sources.
Now of cocourse there are bots circling watching for insider trades. Which you can "milk" by pretending to insider trade and then hedging a bet against them. A whole eco system of scoundrels
Wait until they find out how many people place perfectly timed horse racing bets on the winning horse, JUST before the start of the race. 100% of them knew to back the winning horse
At some point this kind of insider trading will end up hurting any supposed "integrity" of the markets. This sort of thing is meant to be actively prosecuted, even if that didn't always happen or didn't always succeed.
This is an open kleptocracy now. Nobody will be punished for any of this. Any regulatory authorities have had milquetoast deregulatory sycophants put in charge of them. The powers of those agencies have been consistently eroded by a Supreme Court of radical ideologues.
That same court completely invented presidential immunity out of thin air for the person who appointed 6 of them. That president will continue actively selling pardons. If he's not involved in these trades, he'll sell pardons to those who are. And the president himself is free from any consequences. You might be tempted to say "impeachment". I chortle.
A lot of poeople misunderstand the source of the power of the American dollar. They then go on to say nonsensical things like "trading oil in [other currency] will destroy the petrodollar". No. Oil is traded in dollars because of the demand for dollars, not the other way around. What underpins the strength of the US dollar is the US military.
That US military has been humiliated in Iran and really hasn't won a conflict since 1945 (not countin Grenada). This latest war has alienated current allies. If this continues, I can honestly see people looking for an alternative where whoever controls the currency will actually maintain the integrity of the market by prosecuting this kind of kleptocracy.
Government leaders and political policy advisors, intelligence agencies, hedge funds & quants, and large corporations doing crowdsourced forecasting for sure. That's probably why they haven't just been made illegal - the very policy makers are utilizing the data streams from this to predict the near-future to a decent degree. Companies like Cultivate Labs [1] go into the maths of it all but if you prefer videos Hypermind has some good ones [2] - anyone thinking this is just some degenerate gambler thing and criticizing them on those terms likely has no idea that people are doing pretty serious quantitative analysis on these things, to which use I will leave to your imagination
It's pretty much the same math behind weather prediction. Very roughly speaking, they have models to rank predictors (Or say, weather forecasting models) on accuracy and then figure out where the best predictors are all agreeing and the worst predictors are all saying the opposite of those best predictors.
It's worth noting that these prediction markets just run on blockchains, so pretty much anyone with the mathematical and technical knowhow can analyze those data streams and do much better than your average degenerate gambler who has no idea what they're getting into
Key is reconstructing the historical data from the smart contracts that run these things, that's a bit of a challenge but last I checked there's some companies which have figured this out [1]
I thought the point of them is they are âtruth machinesâ they give a financial incentive for the insider class to essentially share what they know.
The benefit to those outside the insider class are that we now have a better idea of the potential outcome.
This is what their argument is, and personally I think it's a pretty good one. But the main issue is that retail is getting fleeced and lives are being destroyed by gambling, so non-professional investors should not be able to use it. Imo, the upside (some fisherman with insider knowledge betting on the Strait of Hormuz) doesn't outweight the downside (a large-scale societal gambling epidemic[1]).
What are they sharing that they know though? That someone's getting bombed in an hour? That the government is rampant with corruption?
The first seems arguably treasonous. And the latter seems directly supported and funded by these "prediction markets".
If the argument is that prediction markets are truth machines, their social function seems to be support crime on a massive scale and get away with it.
If we take a completely utilitarian and amoral viewpoint, the insiders are selling their material, non-public information. The rest of the market participants are buying. From the latter's utilitarian perspective the former are providing a valuable service and getting paid for it. I'm pretty sure there was a legal term for such sales activity...
The only people playing fair are those who don't know how to cheat well enough.
Afaik, Polymarket removes predictions that break CFTC's regulations (this includes assassinations, etc., at least in the US). They basically provide no value unless you're an insider, but they do tend to be leading indicators so it might inform some decisions (like: should you keep your money in oil?) that could be contingent on Polymarket predictions.
Anyone can profit from an information asymmetry or mispriced markets--not just insiders with connections. If you are willing do do enough research you can in theory gain such an advantage. This is what some hedge funds do.
>I would argue that their sole value is to make insider knowledge accessible quicker to the general public.
Is anyone using AI to track these audacious and large bets? Seems like you could actually do this to tell which ones are insider info and which are just stupid random bets?
I would just count which side of the bet has more bets above the median bet size with a zero or near-zero bet history. Insiders are more likely to use throwaway accounts than are non-insiders. Spoofers may however deter such analysis. AI may not strictly be needed for analysis.
Just because an insider bets on something does not in any way make the bet obvious to onlookers until the event is materialized for all to see. There is absolutely no surfacing of intelligence here because big bets are on both sides, winning and losing.
It's deeply American how so many of these articles about Kalshi or Polymarket frame the issue as something that can be solved on the American end with the stroke of a pen, especially in a multipolar world where American sanctions increasingly fail.
These markets are global with global demand and many of the insiders are on the receiving end of American foreign policy. If an Iranian with a starlink sees a b-2 spirit fly over their house that information will find its way to somebody who will profit from that knowledge, it's just part of the new information economy.
> especially in a multipolar world where American sanctions increasingly fail
You're claiming the U.S. government is impotent against holding Polymarket to account?
> These markets are global
The trades in question are bets on Polymarket and Intercontinental Exchange Brent oil futures. These are well within the remit of American law enforcement.
>You're claiming the U.S. government is impotent against holding Polymarket to account?
Yes, if US regulators quash Polymarket their lunch will be eaten by a global competitor HQ'd in a country the US can't touch.
A lot of the insider weekend trading of oil is happening on hyperliquid, a DEX associated with developers in Singapore, what can the SEC or CFTC do to them?
> Why would the U.S. government want to sabotage prediction markets when the chief executive has a vested interest in keeping them legitimate?
"Solving" the problem of administration juniors compromising our military for profit doesn't require sabotaging anything. Just the exchanges turning over records.
Say whatever you want about the merits of prediction markets. But I just don't see a way those benefits outweigh the societal dangers of these constant reminders that people in or close to power can freely profit from their positions in the ways the rest of the population can't. There's always talk about the dangers of disincentivizing job creators, but what happens when a society routinely disincentives job havers in this way? We're just getting a constant barrage of information telling us that if we show up to our job and simply work as we're expected that we're stooges who won't get ahead. You'll need to look for your own individual scheme, ethics be damned, if you just want to keep up with the rest of the population. That's not healthy on an individual level or cumulatively at a societal level.
The current setup does sort of seem like a tax on being stupid. Why would any non-insider participate in these markets? Youâre just asking to get screwed.
Though itâs not that different from the stock market, where the folks at WSB happily give their money to Citadel, Jane Street, and friends, because every once a while, one of them hits it big after going all in that the ball lands on green.
Gambling is a hell of a drug and there are good reasons why it is illegal in so many places. Prediction markets have some good externalities (information), but itâs another addictive outlet for those vulnerable to gambling addiction.
> The current setup does sort of seem like a tax on being stupid.
More like a tax on being ethical or having any morality.
As a hedge. Say you own real estate in UAE, and you note that insurance does not cover acts of war. Betting on something like "Iran Bombs Dubai" creates some form of real estate insurance for you.
Even if you suppose my example is bad, you should be able to envision some case where such hedge is helpful.
Yes, but the examples where it's good has a name "insurance". It exists, it's generally well regulated, and is not easily exploited.
The reason it works better is because in a prediction market, the person betting against you has no resources or ability to go after you for fraudulent behavior. Whereas an insurance company has both.
Why not get a real insurance, where it is actually verified that your house was bombed?
Because there are many things where insurance doesn't exist.
Ok let's work on that then. But meanwhile, close down unregulated websites like polymarket, where there is no verification of actual damage.
You can't just "work on that".
Insurance works on repeatable, predictable risks based on models.
You can't get insurance against a military attack. But you can hedge using a prediction market. It's essentially the version of insurance for one-off events, that relies on wagers since you can't use models.
I'm not saying it's not out there, but in many cases finding insurance for act of war is difficult. It is certainly rare and almost always far less accessible than using polymarket. If you have a very large holding you can probably get someone to write it for you though.
The oil trade structure actually does make sense, because this is how you buy oil, or really any commodity that takes so much space and weight. You order it ahead of time, then if you hold till the contract settles you are allowed to pick it up from the place and in the way designated in the contract specification. In fact you are obliged to pick it up, that's why prices can go negative in exceptional situations. Prediction markets are then just a clean cash-only derivative.
Most of the other prediction markets seems rather stupid to me (they are completely detached from any real world activity), other than their prices being a fairly reliable source of information for bystanders.
>The oil trade structure actually does make sense, because this is how you buy oil, or really any commodity that takes so much space and weight. You order it ahead of time, then if you hold till the contract settles you are allowed to pick it up from the place and in the way designated in the contract specification. In fact you are obliged to pick it up, that's why prices can go negative in exceptional situations. Prediction markets are then just a clean cash-only derivative.
You just described what is happening, you didn't actually provide any reason for why this is good for anyone but the individuals profiting from it.
The point is that's a dubious derivative of a market that makes sense.
As usual, it's a tax on naive and those who get addicted; the twist is that they are willing to pay it, demand and beg to pay it, so providers spring up, legal or not.
Airlines in particular prefer to have a predictable price of fuel, whatever it might be, so they buy futures.
Do they? Afaik, they don't [1].
> WONG: However, Gerry says most of the major airlines in the U.S. eventually soured on fuel hedging. One reason - the Wall Street transaction fees to make these hedges got expensive.
> WOODS: Plus, Gerry says the airlines found that they could make money the old-fashioned way by raising prices. Today, none of the major airlines in the U.S. are hedging.
Hedging is one of those things that sounds cool but then when your service is x% more expensive than a competitor and you lose customers you just stop doing it. It's kinda like being on AWS; when everybody has an outage together nobody asks "oh what can be done differently".
[1]: https://www.npr.org/2026/03/27/nx-s1-5759203/fuel-hedging-on...
Is there a name for the phenomenon of when someone provides a single explanation that is so inconsequential that it ends up being counterproductive because surely they would have given a better explanation if one existed?
If your go-to reasoning for why we need prediction markets is so airlines can have more predictability in their fuel costs, you're inadvertently making a solid argument that we don't actually need prediction markets. And this isn't even getting into the other ways these airlines could satisfy the same need.
That still does not satisfactorily answer the question though, why don't they just sign a purchase order with N month lead time? That still gives a well defined price ahead of time.
The people who need the constant price do that, but creating this contract generates an investment at the same time. The person promising the price is taking a premium to take the risk, they can the sell that risk in a free market.
But that's literally what a "future" is.
are you saying that the people trading on inside information about military operations are⌠producers hedging exposure?
I think the bigger risk is changing major decisions (like war) based on the profitability of bets. Forget about drone war doctrine, if you're an adversary just place absurdly large bets which incentivize the opposition to do what you want. (i.e. bet so you "lose" the bet when the enemy changes their posture to gain the profit).
Politics is already full of these pay to play incentives but now anyone with enough cash can influence world events.
This kind of nation-level hedging has been talked about for years in betting market-aware communities. It's honestly a much better use than fleecing nobodies with insider knowledge.
We should be more worried about who placed the losing bets then. Russia, Israel and China having a market for government and military officials to accept their bribes is kind of a bigger story than insiders fleecing gamblers.
> Say whatever you want about the merits of prediction markets
Go on, I'll wait for those "merits"
Lining the pockets of the vcs who funded them and the other insiders. Nothing but an extractionary industry with no underlying benefit.
More accurate information about the world allows for more effective decision making.
what youâre describing kind of sounds like the wild west or the settlers frontier or the Industrial Revolution, all things that were actually quite beneficial, however in our current environment where everything has been regulated and captured by corporate lobbied legal machinery itâs much worse to have heavy restriction on the masses with the monied upper class able to grease the wheels, if weâre going to have the freedom we need to boom a healthy economy for everyone we need far more wild west from top to bottom
As a foreigner, some view making business with the US as shady in of itself. I usually stand by the US legal system, (which even american citizens might find laughable), but this is by far the most likely reason I would distance myself from doing business.
It helps that some states are bringing criminal charges vs these companies. But it looks like a no contest as to how we'll look back to these kinds of things in 5 years.
Betting on war is war, you may argue that it's an individual's right to participate in war, (I don't think so, I think that it's a war crime for unmarked civilians to participate in war), but funding bellicose action is war.
You'd have to be spectacularly stupid to bet on these kinds of things without having insider knowledge, because you ought to know good and damn well by now that the people with insider knowledge are DEFINITELY betting on them.
This was my thought. If these markets continue allowing insiders, itâll drive all of the cash from regular people away. So there will be way less money for insiders to win even if they are allowed.
So the perception of insiders is pretty bad for prediction markets as a business imo.
The sooner they knock off the rhetoric about the âtheoryâ behind prediction markets and start thinking about it like a business, the sooner they will take insiders seriously.
I think the market could adapt if regular people left. Insider trading would become multilayered and complex. Insiders would scheme against lower-level insiders; decisionmakers would try to trick insiders into thinking that one thing will happen before doing the complete opposite thing. The world would become more erratic and unpredictable, even insiders wouldn't know what is going on.
Although Polymarket is currently spending a lot of money trying to market itself to working-class regular people to get hooked and scam their paychecks out of[0]
[0] https://nypost.com/2026/02/12/us-news/nyc-gets-its-first-fre...
I mean, the thing is, insiders will disagree. Nobody has a crystal ball to predict the future perfectly.
Military operations go awry. Countries react in unexpected ways. Leaders change their minds.
And as a potential event gets closer, insider information changes. Different insiders have different sets of partial knowledge.
You don't even need scheming and tricking. Just regular reality is already complicated enough.
> If these markets continue allowing insiders
What are the chances of large bets being made by anyone who isnât an insider?
A bet against an event is win/win if you want that event to occur. If you are a country that wanted the US to strike Iran, placing a large number of bets that they won't either gets you what you want or earns you money. It is one reason why you can't bet on someone being murdered, as it creates a deniable market to crowd source assassination. Strange that you can crowd source war, but not assassination.
Even if you are not "betting" similar trades are happening in the stock market as well. Large movements in oil futures shortly before policy changes are announced.
Insider trading is at least regulated in the stock market, albeit imperfectly. Imagine how much worse it would be if C-levels could just short their own stock during a board meeting. No one without insider knowledge would touch it.
Matt Levine often says something like "insider trading is not about fairness, it's about theft." The problem isn't that it's less fair to some stock traders than others, and that stock trading should be some form of perfect gambling where everyone has an equal chance of success. Stock trading is inherently about exploiting information asymmetries â that is what all "non-insiders" are trying to do. But insider trading is wrong because it's effectively stealing confidential information from the company & shareholders, which is in violation of & conflict with the fiduciary responsibility that board members, executives, and employees generally have towards shareholders.
Conceptually, I think that is the right analogy to think about. Prediction markets "want" to be a more accurate source of information, just like stock markets, so from that lens "getting" information to be more accurate is good. When government officials are placing bets on prediction markets, though, it's a massive violation of operational security, and leaking confidential information. They probably think that they are acting anonymously, but it creates so many opportunities for unfriendly state actors to get information, especially if people do it consistently.
You also have to be quite stupid to do it with insider knowledge. A bunch of them have been caught in Israel.
Being indicted for treason and treason like charges sounds worse than the SEC coming after you.
Apparently, according to you, lots of people are spectularly stupid because the only way you make money in a prediction market is for someone to bet on the opposing view point.
And how else would one make money in a prediction market? The winner isn't paid from the ether; money doesn't just materialize to pay the winner.
And this is the whole point.
Prediction markets are supposed to be providing the most accurate predictions.
The most accurate predictions come from insider information.
Poeple complaining about insider trading on prediction markets seem to be missing the point. They're supposed to have insider trading. That's the whole idea.
considering the scale involved, and the OSINT trend, is it possible that people could monitor and correlate stuff like airplane, or us navy activity to deduce when to enter ?
I saw a tweet about a trader placing an oil bet when they saw two military aircraft turn around on their way to Iran, via transponder. I believe before the deal was announced.
That also sounds easy enough to fake for some plausible deniability.
Just as parallel construction [1] is used by law enforcement to conceal methods and practices no reason to not expect the same for financial gain.
[1] https://en.wikipedia.org/wiki/Parallel_construction
in fact US army publicly admitting running a disinformation campaign involving flying planes knowing they would be seen by osint in the previous Iran attack from last summer
Do you buy oil or products made with it? Then sorry, you made a bet, and in fact you were just ripped off by your own government for the third time in a row.
This is not a "crypto prediction market" problem.
Same goes for sport betting and yet here we are. People like to bet. They willingly bet on things they have guaranteed disadvantage on (casino games like roulette, slots etc.). People also drink pure poison (alcohol), smoke pure poison (cigarettes) and engage in brain dead activities like speeding and street racing.
Gambling should be judged as any other vice - people get something out of it (rush, hope, whatever) not by rational money allocation standards.
couldn't you somehow in theory track the order book to if and when insiders are betting and then copy the trade?
Not knowing who are the insiders and who is the dumb flow is like the fundamental problem of hft
You can trade on non-public information if you obtain that information unintentionally. Now you have to be able to prove itâs 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 donât have an answer here: is knowing who the insiders are and acting on that a crime? If you did know and didnât 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?
intentionally/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
> you can even be a regular employer of a public company and trade based on information sent on internal emails
You absolutely cannot.
"cannot" here meaning it's likely to be prosecuted, not that you cannot. You absolutely can.
This interpretation is incredibly unlikely. The first and third paragraphs discuss legality, but the middle one was merely talking about likelihood of prosecution?
Even then it would be inaccurate: the regulators are not too stupid to put two and two together that you work for a company and got incredibly lucky with your trade
To be clear, I was responding about trading on internal communications, not specifically a raid. The practice of using internal communication to guide trading runs contrary to most company policies. I happen to have worked at a company where this kind of practice was both acknowledged and openly discussed. It was a strange place.
> the regulators are not too stupid to put two and two together that you work for a company and got incredibly lucky with your trade
Youâre implying some specific combination of factors, but itâs not clear what you mean. What qualifies as "timing"? Around earnings, when trading volume is highest or just around some event? And what exactly counts as "lucky"?
Why would regulators scrutinize a sub-$25k purchase of my own companyâs stock? That concern feels overstated. Granted, Iâm not a lawyer. In practice I can place a trade at any time. If someone is routinely making $20kâ$30k transactions, that alone is unlikely to trigger scrutiny.
The claim that you "absolutely cannot do this" is simply incorrect. I stand by that.
Looks like you're one of today's lucky 10,000* to learn that insider trading is very much illegal!
Here's a few examples: https://www.sec.gov/spotlight/insidertrading/cases.shtml
Some further advice on the matter: https://www.bloomberg.com/view/articles/2018-08-12/the-10-la...
* https://m.xkcd.com/1053/
How is there enough volume to cover the other side of the bet with these minutes-before trades?
The oil market is, to put it mildly, fucking huge
> 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.
For sure, the real trading markets are huge. I mean the betting platforms.
the betting markets offset positions with the real markets. it's all connected
> 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.
Are 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.
the other side can and many times is an arbitrageour which has positions in both the prediction market and the real market
In theory that is part of what was supposed to have been solved by CAT.
What is CAT?
insiders 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.
For prediction markets you can find out who the insiders are for different categories over time, see for example:
https://x.com/peterjliu/status/2024901585806225723
But there is still the problem of knowing which new trades the insiders made before the bet is settled (maybe solved by being an insider of the prediction market), and also since prediction markets need money on both sides (you are betting against other people, not the 'house') when the insiders make their buy they probably eat up most of or all of the action on the other side.
Thereâs a recent Patrick Boyle video which puts it aptly: prediction markets are a wealth transfer from retail investors to trading algorithms and people with security clearances.
Anyway, one thing I donât understand yet is how new markets are created. They arenât user generated, so how did an âIran strikeâ market exist to begin with?
> one thing I donât understand yet is how new markets are created. They arenât user generated, so how did an âIran strikeâ market exist to begin with?
Having the US presidents kids as multimillion dollar investors in the platforms and on the advisory board of one them would be a good place to look
https://help.polymarket.com/en/articles/13364541-how-are-mar...
Users absolutely can propose markets
Prediction Markets require insider trading to function... how do people not know this? It's a setup from day one. If you have the knowledge, you're going to cash in, if you don't have the knowledge, you are throwing your money away.
> But traders werenât just active on Polymarket: there were similar surges of oil futures trading activity just hours before Trump announced updates to the conflict that would lower oil prices.
Prediction markets are all the buzz, but banning them isnât fixing the problem. This has happened forever. Letâs not forget there was an unusual amount of put option buying right before 9/11: https://ideas.repec.org/a/ucp/jnlbus/v79y2006i4p1703-1726.ht...
Most gamblers prescribe to the cost sunk fallacy and keep 'one more time'ing it to bankruptcy.
Math wins over your feels every time.
If you follow your math, such gambling losers don't really have that much money to bet on an ongoing basis. The ones who support the losing side on prediction markets are the ones who usually do fine, but sometimes are taken by surprise.
Problem gamblers routinely take out loans, mortgage major assets, max out credit cards, and steal from their employers to fund their habits.
Statcon 101: Gambling addicts take loans to gamble, those loans are sold to your pension fund. Who is the loser?
The theory would be that the people without information pay for knowledge. Or to hedge against certain events.
Similarly to how people would pay premium over inusrance
I've never seen an ad from either Kalshi or Polymarket that says "don't play if you aren't an insider."
The game only works if they also have a lot of people losing money.
Yeah just another Ponzi scheme; one sided extraction with a slight chance of payout that never comes
Stephen Miller and Charlie Kirk were pretty clear their sides whole philosophy is take and never give back. They learned it was OK not from their parents but gen pop sitting on their hands.
The entire economy is Las Vegas now; only the (white) house wins
potentially, each time.
>Prediction Markets require insider trading to function.
And yet there are folks like me who have been on them for years before kalshi/polymarket making a very good side income from them without having insider knowledge.
Prediction markets as a whole are very very inefficient. That's not to say that insider trading doesn't exist but you can't claim that they require insider trading to function.
In my opinion the entire prediction market is simply a way to legalize insider trading and war profiteering.
Without them talking about how much people LOST, this entire article is meaningless. With the advent of 0DTE options which dominate options trading, the fact that the notional number of people who made money makes sense because so many more people have lost money.
Yes, someone is on the other side of the losing trade, but how many people (not firms) do you know who write contracts for short term options?
I personally donât know any, and I worked at one of the biggest HFT firms for a few years.
The losing side(s) of these positions are heavily hedged, and are happily making money on volume and volatility. (And making record profits this year)
Of course they made money from other traders. But that is precisedly the issue with insider trading - you are taking money from more honest traders.
Why wouldnât the platforms require the identity of people cashing out more than, letâs say, $10k a year to be public? Or at least, require KYC level trail to cash out so it can be investigated later.
It protects 99% of people who want to have fun by losing money and prevents insider trading at no virtually no cost.
These articles always focus on "Yes" bets. An insider betting "No" might get by completely unnoticed.
Why canât the markets just forbid transactions that happen within 48 hours of resolution?
Because the markets donât âforbidâ anything, especially when they are profiting from it, which polymarket definitely is. Itâs the government who must forbid things for the good of the citizens. But somehow the citizens were dumb enough to fall for the bullshit idea that you should put the same person who is profiting in charge of regulating their own crimes!
What does that solve? Wouldn't the insiders in e.g. the Iran War just have to place their bets 3 days before?
Itâs all manipulation and everyone knows it but when the voices are coming from inside the house, whoâs going to investigate? If anything every tech company in the whole flow is going to support and add custom flows for them - âto get on their good sideâ
Thereâs something deeply wrong with the executive branch controlling law enforcement and who gets prosecuted in the US. Jack Smith had him dead to rights in two cases (read the indictments they are water tight) that his attorney general then dismissed. Itâs a travesty. Thank you âlet the courts handle itâ McConnel.
Itâs not perfectly timed bets, itâs called insider trading.
Just one more thing this administration has brought into mainstream.
These headlines always irritate me because they use notional value for sensationalism. The 950m notional is if they were paying for a price move of the whole thing from $0 in cash. But these are highly levered futures contracts. And you are getting in and out at 2 price differences that are close to each other.
Itâs still shocking corruption and absolutely should be enraging. But thatâs because itâs a 10s of millions dollar trade. Not a billion dollar one.
100%.
They might as well quote the Quadrillions changing hands in the OTC derivative package markets.
How can I evalutate if this is a real issue for cherry picked. Someone won the lotto last week. They must have had insider knowledge! Oh, no, I forgot to look at all the people who didn't pick a winner.
> Sixteen bets made $100,000 each accurately predicting the timing of the US airstrikes against Iran on 27 February
How many bets and for what ammounts were made for other days, or that it wouldn't happen on the 27th?
Yes I would have liked to see some more intelligent analysis and statistical justification. This article is just outrage-bait for common consumption.
I wonder if this means that in a true free market betting is actually impossible as extra-gaming structures like those spontaneously emerge.
You need centralized regulation to make it work.
The standard argument for prediction markets does not include any kind of fairness in gambling. Rather, the point is precisely to surface insider or otherwise well-founded knowledge of the real odds so they can be available to anyone who wishes to look at the price.
(And I do not see how this first-order viewpoint is problematic, precisely. Itâs the second-order consequences of people making the currently-considered-unlikely decision in order to cash in on a bet that I have an issue with.)
Somebody should these track these people down, and say to them:
Nice insider trading scam you have going. Be a shame if something happened to you.
Then defenetrate them.
What's the statute of limitations on such things?
Because it won't be prosecuted by 2029 but could be afterwards
Personally I think it's a bigger problem when the President sues his own government for billions and then orders them to pay it out
Because -that- is not an official act. It could be prosecuted but no-one will touch it even after 2029
Doesnât matter. Theyâll be pre-pardoned.
https://thehill.com/opinion/white-house/5829203-presidential...
Given Trump has promised blanket pardons for any illegality from his administration during his term, I think the question will be whether pardons for crimes not yet investigated/charged are covered by the pardon and whether anyone will pursue those investigations and convictions.
Democrats have historically not really been willing to do anything if there's any plausible sounding reason for doing nothing, so I'm guessing they'll jump at the opportunity to wave away the insider trading stuff. Let bygones be bygones, you know, in the spirit of bipartisanship and comity. They slow-rolled prosecuting the crimes of the first Trump administration. So slow that he was re-elected before anything began to happen.
War crimes probably have their own statute of limitations.
Unless somebody snitches there's no real way to prosecute insider trading. You can say you just felt like making a trade, or that you read one of Trump's posts the moment he put it up on Truth Social and you just happened to have the trade ready to go.
Unless they're absolute morons, the people doing insider trading for large sums of money will have already built a strong alibi.
> Unless somebody snitches there's no real way to prosecute insider trading. You can say you just felt like making a trade
If you have perfect opsec, sure, you'll just waste a few years and hundreds of thousands of dollars in court. If you texted a friend, or told a friend who then texted a friend, or traded too soon after receiving privileged information, you're probably fucked.
> Unless they're absolute morons
At least in securities, the dirty secret is most insider traders are in Congress and/or morons.
> Unless they're absolute morons, the people doing insider trading for large sums of money will have already built a strong alibi.
My theory is they are banking on preemptive presidential pardons in Dec 2028.
Trump already said he will do this.
https://www.msn.com/en-us/news/politics/trump-plans-to-pardo...
https://www.independent.co.uk/news/world/americas/us-politic...
Keep in mind that preĂŤmptive pardons have not been upheld by the courts [1].
[1] https://www.criminallawlibraryblog.com/preemptive-pardons-co...
If that reached the supreme court however, precedent sadly might not matter too much.
In some nations just gambling on a war that your soldiers have died in would ruin people's careers and possibly their lives permanently as they are shunned by society.
In other nations you can illegally sell arms to Iran in order to illegally evade congress's attempts to stop you supplying money to terrorists, illegally shred evidence and lie to congress under oath about it all and get a job as a pundit on Fox News.
I'm not convinced there won't be someone with a chip on their shoulder eager to snitch. Trump has been known to leave folks out to dry once they're used up (for example, Ruby Giuliani and Mike Lindell). Just today there's been discussion about how Kash Patel feels like he's on the chopping block:
https://news.ycombinator.com/item?id=47813001
you can say you just felt like making a trade, or that you read one of Trump's posts the moment he put it up on Truth Social and you just happened to have the trade ready to go.
An employee with access to Truth Social's backend can in theory do this by reading the tweets he's writing before he sends them.
Good for those who made the money. I would have done so had I had such insider info, as long as it didn't compromise any operation.
As long as the hordes of losers are not bothered by it enough to ask for fairness in the business, youâre right. Ethics and morals are constructs with the intention of creating a better, more just common existence. If the people in this common existence donât care, then there is no reason for them not to do it.
Do you not think that that would have a negative impact on the world? or do you not care, or is this "the world is going to hell so I may as well get mine"?
We all know the president and those close to him are making these bets. The question is are lawmakers willing to collectively take action to stop this practice?
âTradersâ itâs not the word I would use. Maybe traitors.
Yet more evidence of the rapid disassembly of the social contract and our collective ethics, aided of course by unregulated tech. If you work for â or are involved in the funding of â these unregulated gambling and insider trading platforms, you should be ashamed of yourself. Your greed and lack of concern for the health of the human world you live in is sickening. You can get bag after bag but it will never fill the void in your soul.
This applies to almost everyone working on SaaS; not in all cases, but the absolute majority work on SaaS means creating artificial scarcity in order to extract value from people. It is a fundamentally evil, antisocial, anti human thing to do. If you believe that is okay to restrict access to infinite resources to preserve the status quo you deserve the same place in hell as the people pushing gambling.
Don't create artificial scarcity. Don't play zero sum games.
> almost everyone working on SaaS; not in all cases, but the absolute majority work on SaaS means creating artificial scarcity in order to extract value from people.
Maybe this is just my lack of understanding in how most SaaS companies operate... But to me making software that people find valuable and charging them for that is not inherently immoral. Surely that is the majority of cases?
> This applies to almost everyone working on SaaS;
The original idea behind SaaS is to align the incentives of the customers and the software company.
Historically software companies made money on selling upgrades. This meant bug fixes were not a priority, and security fixes were something companies got shamed into doing.
SaaS fixes that incentive problem. With reliable ongoing revenue a company can keep software patched and updated and doesn't have to cram a bunch of new shiny marketable features in just to make a huge sale every 3 or 4 years, while engineers try and add whatever bug fixes they can after the shiny new features have been polished off.
It also means software companies don't have boom or bust cycles with hiring. Funding stays consistent, and so does staffing. It makes the financials much easier to manage. Companies used to hire a bunch of temp employees in the run up to a release.
Ongoing release cycles also led to better software engineering practices. More automated tests, reproducible builds, better version control systems, and a lot more things that we take for granted now days.
There are obvious downsides to SaaS as well, but the original idea was good.
Iâve never heard âintellectual propertyâ phrased as âartificial scarcityâ and it isnât exactly wrongâŚ
> Don't create artificial scarcity.
Nah. You know what the answer is? Get to a mental and physical state where you need very little. Right now the only way to win is not to play.
This is pseudo-intellectual drivel. Creating value and then charging for it is not creating âartificial scarcityâ, any more than doing nothing is creating âartificial scarcityâ by absence of value. There was no âinfinite resourceâ that just happened to exist before the work was put in to create it. And creating value is - almost by definition - completely orthogonal to zero sum games.
The biggest sums involved appear to be on the oil futures market. That market has existed for a long time (half a century to a century depending on the sophistication you measure). If this is is a novel occurrence it cannot be the platform that 'caused' it.
I think it's just that we create useful tools: futures, the pre-emptive pardon, and so on. Then people figure out how to use those tools to enrich themselves in ways we did not anticipate. It's just a question of how we fix our machinery in this cat and mouse game or if it is fixable at all.
This is the only reasonable point of view to take on the widespread and obviously unethical outbreak of gambling platforms. The fact that it's downboated and towards the bottom is just a reflection of how far the discourse has fallen.
Granted, maybe I should be less surprised given the fact that this is all being posted on the promotional website of a technology-focused private equity fund, but it's disappointing nonetheless.
Insider trading exists with stocks too. I mean, if there is a way for people to profit by bending the rules or information asymmetry, someone will find a way.
Isn't it more than the ability to manipulate global markets essentially means we're headed towards a global inflation crisis? No one with critical thinking skills believe Elon's valuations are a rational market concern.
But if they _are_ rational, eg, a zimbawean inflation nightmare, then if you're not trying to "escape the permanent underclass" then _you_ are the irrational person.
So ignoring all politics, we're really dealing with a zeitgeist of people who think wealth inequality is endless, and the only way to survive is to lobster bucket and YOLO every chance to gamble.
According to the Guardian, clicking around on some websites.
I guess, how many not perfectly timed bets did traders bet on these things?
I would be careful about attributing all of this to ordinary insider trading. Another plausible explanation is that some activity could come from state linked or intelligence adjacent actors, where the goal is not only profit but also testing or exploiting prediction markets as an auxiliary information channel.
Occam would disagree.
The most Occam-safe explanation is not insider trading but actually hard work in analytics to rapidly surface intelligence from X and other alternative data sources.
occam doesn't work in financial markets.
because if it did you would print money by following occam.
Now of cocourse there are bots circling watching for insider trades. Which you can "milk" by pretending to insider trade and then hedging a bet against them. A whole eco system of scoundrels
You don't get it, you can make m o n e y with it, with which you can buy a yacht and an expensive car.
and then spoofing. Creating fake trades to entice copycats.
These are clearly leaks and probably violate other laws. If the Trump administration actually cared, they would pursue them.
They aggressively pursue other leaks, including searching journalists' property.
Related:
Traders place $760M bet on falling oil ahead of Hormuz announcement
https://news.ycombinator.com/item?id=47812385
Wait until they find out how many people place perfectly timed horse racing bets on the winning horse, JUST before the start of the race. 100% of them knew to back the winning horse
This story isn't new. Several sports were famous for corruption caused by bets: box, soccer, bicycle racing, etc.
The result is always a loss of credibility. With time, only the dumbest keep betting.
At some point this kind of insider trading will end up hurting any supposed "integrity" of the markets. This sort of thing is meant to be actively prosecuted, even if that didn't always happen or didn't always succeed.
This is an open kleptocracy now. Nobody will be punished for any of this. Any regulatory authorities have had milquetoast deregulatory sycophants put in charge of them. The powers of those agencies have been consistently eroded by a Supreme Court of radical ideologues.
That same court completely invented presidential immunity out of thin air for the person who appointed 6 of them. That president will continue actively selling pardons. If he's not involved in these trades, he'll sell pardons to those who are. And the president himself is free from any consequences. You might be tempted to say "impeachment". I chortle.
A lot of poeople misunderstand the source of the power of the American dollar. They then go on to say nonsensical things like "trading oil in [other currency] will destroy the petrodollar". No. Oil is traded in dollars because of the demand for dollars, not the other way around. What underpins the strength of the US dollar is the US military.
That US military has been humiliated in Iran and really hasn't won a conflict since 1945 (not countin Grenada). This latest war has alienated current allies. If this continues, I can honestly see people looking for an alternative where whoever controls the currency will actually maintain the integrity of the market by prosecuting this kind of kleptocracy.
What value do prediction markets give to anyone not in the insider trading class?
I predict these will be banned when someone finally uses them as an "assassination market".
Government leaders and political policy advisors, intelligence agencies, hedge funds & quants, and large corporations doing crowdsourced forecasting for sure. That's probably why they haven't just been made illegal - the very policy makers are utilizing the data streams from this to predict the near-future to a decent degree. Companies like Cultivate Labs [1] go into the maths of it all but if you prefer videos Hypermind has some good ones [2] - anyone thinking this is just some degenerate gambler thing and criticizing them on those terms likely has no idea that people are doing pretty serious quantitative analysis on these things, to which use I will leave to your imagination
[1] https://www.cultivatelabs.com/crowdsourced-forecasting-guide
[2] https://www.hypermind.com/master-class
Thanks for the links, very interesting.
It's pretty much the same math behind weather prediction. Very roughly speaking, they have models to rank predictors (Or say, weather forecasting models) on accuracy and then figure out where the best predictors are all agreeing and the worst predictors are all saying the opposite of those best predictors.
It's worth noting that these prediction markets just run on blockchains, so pretty much anyone with the mathematical and technical knowhow can analyze those data streams and do much better than your average degenerate gambler who has no idea what they're getting into
Key is reconstructing the historical data from the smart contracts that run these things, that's a bit of a challenge but last I checked there's some companies which have figured this out [1]
[1] https://www.probalytics.io
I thought the point of them is they are âtruth machinesâ they give a financial incentive for the insider class to essentially share what they know.
The benefit to those outside the insider class are that we now have a better idea of the potential outcome.
How can anyone differentiate an insider bet from a normal one enough to actually make use of it?
This is what their argument is, and personally I think it's a pretty good one. But the main issue is that retail is getting fleeced and lives are being destroyed by gambling, so non-professional investors should not be able to use it. Imo, the upside (some fisherman with insider knowledge betting on the Strait of Hormuz) doesn't outweight the downside (a large-scale societal gambling epidemic[1]).
[1] https://www.psychologytoday.com/us/blog/inside-out-outside-i...
I think it's worth noting that my bank lets me ruin my own life too if I want with their own trading platform
What are they sharing that they know though? That someone's getting bombed in an hour? That the government is rampant with corruption?
The first seems arguably treasonous. And the latter seems directly supported and funded by these "prediction markets".
If the argument is that prediction markets are truth machines, their social function seems to be support crime on a massive scale and get away with it.
Well, that's the entire point.
If we take a completely utilitarian and amoral viewpoint, the insiders are selling their material, non-public information. The rest of the market participants are buying. From the latter's utilitarian perspective the former are providing a valuable service and getting paid for it. I'm pretty sure there was a legal term for such sales activity...
The only people playing fair are those who don't know how to cheat well enough.
Afaik, Polymarket removes predictions that break CFTC's regulations (this includes assassinations, etc., at least in the US). They basically provide no value unless you're an insider, but they do tend to be leading indicators so it might inform some decisions (like: should you keep your money in oil?) that could be contingent on Polymarket predictions.
Anyone can profit from an information asymmetry or mispriced markets--not just insiders with connections. If you are willing do do enough research you can in theory gain such an advantage. This is what some hedge funds do.
I would argue that the sole value of prediction markets is to make insider knowledge accessible to the general public, quicker than it normally would.
Thatâs why these platforms saying things like âwe will roll out insider tradingâ is laughable.
>I would argue that their sole value is to make insider knowledge accessible quicker to the general public.
Is anyone using AI to track these audacious and large bets? Seems like you could actually do this to tell which ones are insider info and which are just stupid random bets?
I would just count which side of the bet has more bets above the median bet size with a zero or near-zero bet history. Insiders are more likely to use throwaway accounts than are non-insiders. Spoofers may however deter such analysis. AI may not strictly be needed for analysis.
I haven't actually used the platforms except looking at betting odds for elections. Do they give any tools for looking at past results and analyzing?
Just because an insider bets on something does not in any way make the bet obvious to onlookers until the event is materialized for all to see. There is absolutely no surfacing of intelligence here because big bets are on both sides, winning and losing.
Maybe a superhuman AI? /s
It's deeply American how so many of these articles about Kalshi or Polymarket frame the issue as something that can be solved on the American end with the stroke of a pen, especially in a multipolar world where American sanctions increasingly fail.
These markets are global with global demand and many of the insiders are on the receiving end of American foreign policy. If an Iranian with a starlink sees a b-2 spirit fly over their house that information will find its way to somebody who will profit from that knowledge, it's just part of the new information economy.
> especially in a multipolar world where American sanctions increasingly fail
You're claiming the U.S. government is impotent against holding Polymarket to account?
> These markets are global
The trades in question are bets on Polymarket and Intercontinental Exchange Brent oil futures. These are well within the remit of American law enforcement.
>You're claiming the U.S. government is impotent against holding Polymarket to account?
Yes, if US regulators quash Polymarket their lunch will be eaten by a global competitor HQ'd in a country the US can't touch.
A lot of the insider weekend trading of oil is happening on hyperliquid, a DEX associated with developers in Singapore, what can the SEC or CFTC do to them?
Why would the U.S. government want to sabotage prediction markets when the chief executive has a vested interest in keeping them legitimate?
> Why would the U.S. government want to sabotage prediction markets when the chief executive has a vested interest in keeping them legitimate?
"Solving" the problem of administration juniors compromising our military for profit doesn't require sabotaging anything. Just the exchanges turning over records.
you may have missed that all those have been happening for months and are tightly tied to the trump administration ?
same administration who has a son sitting on the board and a father president who has lifted all sanctions and investigations.
we even have video of representatives placing their bets or buying stock during session, right before voting on the matter.