So 25% of users are profitable? That's vastly more than on financial sites - stocks/futures/forex/options trading where only 5% of bettors are profitable.
If you're "investing" in a prediction market, you're "investing" because the alternative is going to your local casino, breathing in unholy amounts of cigarette smoke, and getting into a scuffle with a senior gambling their OASDI check over which slot machine you're sitting at.
And that's just not something most tech bro types are interested in. It screams "loser", not "value creation and market disruption wunderkind".
Source? I'm not doubting that there are products and forums where 95% of traders lose money. But that's far from representative for most financial-market participants.
The majority of active traders won't beat the market (e.g. the S&P 500). That doesn't mean they aren't profitable.
"Someone allegedly used a hairdryer to rig Polymarket weather bets" https://www.engadget.com/big-tech/someone-allegedly-used-a-h...
* Polymarket is a bit more transparent with who placed what bet, so it's a good place to go to study winners.
* The most consistent Polymarket winner I saw was placing 95%+ odds many, many times a day.
* Most markets will have a surprisingly small liquidity, so if your edge is just 5% you won't make as much as a 5% edge in the stock market could make you. This is good in that it keeps the biggest fish out, but some big players seem to be using strategies based on holding the most chips.
* Paper trading in Polymarket/Kalshi is very different than paper trading in the stock market, because even a few grand in Polymarket/Kalshi can have a big impact in how other "traders" interact with you. The traditional paper trade validation -> unleash the bot strategy doesn't work. You need to real trade with real money and scale up while watching how the market responds.
EDIT: Bonus learning -- yes the market runs by getting fish into the system. That's why Kalshi is advertising so much, it attracts suckers for the professional to win from, all while Kalshi takes a percentage.
Generally, you're going to lose money - so don't do it.
Myself I was working on finance-adjacent stuff at the time and thought it had educational value. I did OK trading my favorite penny stock but I've had my share of financial misadventures, like I just had to buy $XIV because I wanted to see what happened and... I did.
What failed? Was it too late to follow the trend by the time one was identified or something else? It seems much more transparent than trying to reason about say dark pool trades.
* I only had the example trades in the news as 100% confirmed positive trades.
* There are hundreds of millions of dollars in trades a day in Polymarket.
* In Polymarket you can just spin up a new account. If an account spins up, makes a $50k bet and wins, and then has no other activity, was that an insider trader or just someone with a behavioral pattern of spinning up new accounts? Just following up on these types of trades didn't provide a very big edge, as the nature of the trade adjusts the payout percentage.
Prediction markets fatally suffer from two Problems.
1) large sharks making huge bets at the end (destroying any signal from earlier bets)
2) inside information on poorly written bets.
The solution is parlay style payouts but that destroys popularity (you are paid out at closing odds not at your time of bet odds spread to sell position).
I think you mean parimutuel payouts?
The winners, as you point out, are the house and those with insider knowledge.
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ramon156•1h ago