There's a saying in poker that if you sit down at the table and can't immediately find the donkey(1), you are the donkey. At some point, anyone playing around in a prediction without insider info will be the donkey.
Yes, and let me add that that's by design. Prediction markets' main function is to incentivize people with private information to make it public.
We get it but what good is it if the insiders come and bet mere hours before the event happens? So we could have known a few hours early? I feel like this is just people trying to justify gambling. In the UK bookies have been doing this forever, it's nothing new. It's just gambling.
How does making a wager cause insider info to be public? All it means is an anonymous account placed money on the outcome, how does it make public anything that an insider knows? It doesn’t.
It incentives them to keep the info secret in order to profit or a wager on a related outcome. The insider info remains secret, all people know is some bloke stood up a new account and placed a big bet.
And for these short timespan bets, it seems utterly useless. If the wagers were only allowed on things two weeks out, and not allow bets on short term events then maybe it could show more info.
The price movement is the indicator that there is insider information.
Of course there are lots of problems with this theory - in large markets a single trader has to make large bets to move the market, and with the current leadership the price moves large amounts unpredictably as well based on the latest statements.
But the mechanism itself makes sense.
It's unclear if that's a good thing. Of course some people know secret information before hand. Is disclosing that always good?
Arguably it’s a very useful property of prediction markets as long as everyone is aware that’s the case.
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Can someone explain to me how we haven’t regulated the hell out of the clearly illegal sector of betting on shit that can clearly be insider-traded with little to no scrutiny?
Leaders? Are you awake at the wheel?
Does it need to be regulated? This isn’t pension funds placing bets risking people’s investment money.
People using Polymarket are gambling on pretty random things and must understand the risk
, whether it is on major geopolitical events or someone counting cars going through a junction these events can all be manipulated pretty easily.
People want to gamble on random things? Let them.
If anything is regulate the other side, people in government can’t use sites like polymarket because I don’t want them making stupid decisions so bets fall one side or another.
Who do you think places those bets
The leaders are the ones profiting from it.
Because they're the ones doing it and they have the power? Sorta inevitable outcome of markets in everything, really.
I mean... insiders are betting on war crimes. Yes, the insider betting is bad but it doesn't even touch the edges compared to committing war crimes. And if the government is committing war crimes, why would they care about something so inconsequential as betting on them?
They’re the ones doing it lol
I wanted to reply, but I think I just don't understand your comment at all.
Are you saying the "sector of betting on shit that can clearly be insider-traded" is illegal? Does that include like gold and S&P500?
The way I see it, prediction markets' main function is to connect gamblers with insiders posessing useful information. Are you concerned for the gamblers losing? But they were gonna lose anyway, one way or the other. Or are you concerned about the insiders winning? Sucks, but at least the public gets information by way of the prediction market being more accurate.
Please Explain how a last minute insider info bet helps the public in any way or fashion aside from fleecing fools of their money?
Nobody is forcing anybody to place the bets, but if you see credible money flows into eg. Middle East cease fire bets, you can decide to fill up your tank today, or not. We can’t think for you here, if you don’t see anything useful in the price then it’s time to educate yourself until you do. You should consider these bets more trustworthy than any news you read in mainstream media. There might even be a way to fund journalism here, though ethics are quite muddy indeed.
And what makes you believe that those (basically) peanuts that get bet are the real indicators?
The insiders might as well run a backroom prediction market and just manipulate the public market.
And even with bigger sums: you never know if it isn't just a variant of the shell game. There are no real signals.
> as records show substantial bets
They're not bets anymore. Now they're swaps.
Given the accused breaking of ceasefire shortly after agreement, not sure how this bet really gets paid out.
There were people who bet against… if there’s no one on the other side to take the opposite bet, you don’t have a bet. And you won’t get a payout.
I think the question was: Who gets the payout?
The bet is: There will be a ceasefire.
There was a ceasefire, but it was allegedly broken almost immediately after. So does that count as ceasefire or not? There are arguments for both sides, so you could also say it's a tie and neither party gets the cut and the bets will be refunded.
You can just read the rules for that particular prediction on Polymarket yourself. In this case according to the rules it just comes down to whether or not there is an official ceasefire by a particular time. It does not say anything about what happens if the ceasefire is broken after that time so in that case it doesn't actually matter that it was broken.
Usually the market have rules that define the bet more concretely than just "there will be a ceasefire", and resolutions can be disputed where they will be arbitrated by the market operator. For this particular market you can see that here (https://polymarket.com/event/us-x-iran-ceasefire-by), but I'll paste the current text too:
This market will resolve to “Yes” if there is an official ceasefire agreement, defined as a publicly announced and mutually agreed halt in direct military engagement, between the United States and Iran by the listed date, 11:59 PM ET.
For the purposes of this market, an “official ceasefire agreement” requires clear public confirmation from both the United States government and the government of Iran that they have agreed to halt military hostilities against one another, or for an official ceasefire agreement to be otherwise confirmed to have been reached by an overwhelming consensus of media reporting.
If the agreement is officially reached before the resolution date, this market will resolve to “Yes,” regardless of whether the ceasefire officially takes effect after the resolution date.
Any form of informal understanding, backchannel communication, de-escalation without an announced agreement, or unilateral pause in hostilities will not be considered an official ceasefire. Humanitarian pauses, limited operational pauses, or temporary tactical stand-downs will not count toward the resolution of this market.
A broader peace deal, normalization agreement, or political framework will qualify only if it includes a publicly announced and mutually agreed halt in military engagement between the United States and Iran, effective on a specified date, or otherwise confirmed by an overwhelming consensus of credible reporting. Agreements that outline future negotiations or de-escalation measures without an explicit, dated commitment to stop fighting will not qualify.
This market’s resolution will be based on official statements from the United States government and the government of Iran. However, an overwhelming consensus of credible media reporting confirming that an official ceasefire agreement has been reached will suffice.
So the real answer is, "whoever the market operator chooses".
This seems to involve there being an agreement in place, but not necessarily in effect or even followed, so the possibility of it having already been violated seems to be irrelevant
They put a lot more thought into the terms than the Trump administration did, that's for sure.
Still: does the combination of a deranged Truth Social posting, an obviously-pasted tweet from the Pakistani government, and a 10-point list of debatable provenance count as "clear public confirmation?"
I guess so, sort of, maybe? Fortunately I don't have a 7-figure wager at stake.
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and there are always fool in market.
So I follow the oil and gas industry and markets. For anyone that doesn't know, commodity markets mostly operate two different markets: futures and spot. Futures contracts are an agreement to deliver (or take delivery, depending on which side you're on) a certain quantity of a standardized commodity at a given date. Futures markets tend to be a mix of speculators (who are simply betting on price movements of the underlying) and traders who produce or want the underlying. The advantage of a futures contract is it can allow someone to hedge their costs and lock-in prices. All sorts of producers and industries use them for that.
Oil futures are standardized into several standard types (9 I think, I might be off). You will hear terms like West Texas crude and Brent. This refers to two main factors: the relative mix between lighter and heavier hydrocarbons (called the API gravity) in the oil as well as the sulfur content.
One side benefit of all this is discovery. It's a way of measuring sentiment. So if future oil prices rise, it indicates market sentiment is negative about the war and they further disruption is expected. When it looks like hostilities may end, the price drops.
But there's a problem: nobody trusts the market anymore. It's being manipulated as insiders are clearly frontrunning news with massive bets, sometimes minutes before news gets released. This has been happening with other markets too, most notably SPY futures. Markets cease to function once manipulation becomes widespread.
The future price is also called the paper price and another signal that the paper price is meaningless is that the spot or physical price for oil has skyrocketed well beyond any oil prices you might see in the news. For example, a few weeks ago, physical Dubai oil was nearing $180 per barrel. West Texas crude had a future price of $110 yet the physical price was $140+.
An issue here is that the physical price isn't easily discoverable. It's hidden behind subscription services that cost thousands so you only hear about it when it's reported on. But this means talking heads are reporting on $110 oil when it's really $150.
We saw a similar mismatch with the silver market at the end of last year. That market too was clearly being manipulated but rather than insiders, many (including myself) suspect it was the refiners and others who had lost with silver's massive rally and were doing everything to pop the bubble, including changing the exchange's liquidity ratios to force sales.
In previous years, some or all of these people would get investigated and prosecuted by the SEC for insider trading. That agency has been defanged by putting a pro-deregulation loyalist in charge but the bigger problem is that some or all of these people will be buying pardons before the president leaves office. And the president can no longer be prosecuted thanks to the Supreme Court inventing presidential immunity.
One source of American power is the control over the global financial system. All of this insider trading risks dismantling that. It's not hard to find people who are sitting out because they simply don't trust anything anymore. If this spreads to financial institutions and institutional traders, that's going to be a big problem.
So-called "prediction markets" (and crypto) are even less regulated than that. Unless you have insider knowledge or you're betting on something that isn't prone to insider information (and I honestly don't know what that would be), I'd stay away.
And these prediction markets are small fry. SPY futures are a significantly larger market. So is oil and gas. And Treasuries is order of magnitudes bigger than either of those. Yet some of those markets can't be trusted and I suspect this is only going to get worse.
I don't have any hope that anyone will ever be prosecuted for any of this.
> That agency has been defanged by putting a pro-deregulation loyalist in charge but the bigger problem is that some or all of these people will be buying pardons before the president leaves office. And the president can no longer be prosecuted thanks to the Supreme Court inventing presidential immunity.
This is not a "bigger problem".
> the president can no longer be prosecuted thanks to the Supreme Court inventing presidential immunity
In 2015, there were a hundred things you could've inserted into "The US cannot ___" or "The POTUS cannot ___", that have happened since. Things "can't" until they can.
> I don't have any hope that anyone will ever be prosecuted for any of this.
Agreed, but this is _solely and entirely_ due to a lack of will to do so, not because of any laws.
Thank you for the thoughtful analysis. I'd echo that the deregulation and corruption of these markets has two impacts:
1) less "legitimate" (non-corrupt) capital flowing to these markets which may ultimately reduce the liquidity and value of the asstrs.
2) more speculative deployment of capital, which means that capital is used for making bets rather than uses for productive purpose (such as investing in legitimate investments that are productive for the economy.
Why would a insider invest in legitimate, productive investment when they can make outsized gains in betting markets or corrupt futures markets?
And yes, long term this will massively taint the US financial power and make economies like the UK more appealing.
I find it very hard to understand why so many people and institutions are still participating in markets that are obviously full of insider trading. It's basically just giving money away to the insiders. Why do people do this?
Institutions do not stake their own money and are somewhat averse to the direction of the market. As for common people, they're generally not known to do the most rational thing.
You're a fund manager. What's the alternative? Throw your hands up and tell your customers to take all their money back, you don't want to get paid anymore?
Exactly. Barter is super insanely expensive in comparison with the most manipulated paper markets; thus, if you closed the current markets, the participants would be very highly incentivized to create a new one, which would likely be worse on all accounts.
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As a tick jockey myself, reading futures markets are like reading tomorrow’s NYT headline. These markets portend events with uncanny accuracy.
spend more time on twitter. nyt is just twitter 16 hours late
I think you misunderstand. His comment about futures markets is equivalent to your comment about twitter. Neither of you are getting your news from NYT.
Futures are sometimes informed hours earlier than Twitter was the point
Imagining that hurricane prediction cone they put on maps, Twitter encompasses the entire cone and then some. Someone on Twitter is gonna be right, but rarely the same person consistently.
Dumb point, but you said SEC. But they don't have authority over commodities, and aren't the rules different for them anyway?
Other than that, I think a lot of what you said was interesting.
You are correct: the CFTC has primary authority over commodities and futures. I'm glad you pointed this out because in looking up who it was I learned that the cFTC (not the SEC) has regulatory authority over prediction markets too. That was new information.
This made me curious: who regulates sports betting? And the answer seems to be... nobody. Well, the states. I guess I should've known that because I know some states ban sports betting.
But that's interesting compared to prediction marekts. Since they're federally regulated, states don't have as much control. And I see that the current CFTC commissioner is suing states to block prediction markets. And prediction markets can and do allow sports betting.
Another "win" for dual sovereignty.
What is a typical price difference between the paper and spot prices? 1% or 10%+ is common? In the past 24 hours, the futures price dropped a huge amount. Is the spot market dynamic enough that prices can get reflected so quickly? Where does it stand in the past few days?
It is also interesting to think about the game theory on how you respond to markets during volatility. If you are a producer or have excessive storage capacity - when do you sell? From my armchair position, it seems like conditions are only going to get worse. Do you hold back some reserves, hoping to cash in on a higher pay day in the future? Then you have to wonder how many might be doing the same.
This is hard to say because physical delivery prices aren't easily discoverable (as mentioned).
Here's one way it matters though. Futures markets are typically in a state of backwardation or contango. Backwardation simply means the spot (or physical) price is higher than the paper or future price. Contango is the opposite. Whichever one it is, says something about the current market and the expectations for the future.
So the silver market was in backwardation where the paper price was $75+/oz but the physical price might've been $100+ but nobody was buying. People with silver delivery obligations were simply borrowing silver from those who had it rather than buying it on the spot market. There's a whole separate market for borrowing commodities and the premiums soared. But people who had shorted silver simply couldn't afford to buy on the spot market without going broke so they didn't. They kicked the can down the street, borrowed and then lobbied for the exchange to pop the bubble (which they did).
The best example of a contango market was in March-April 2020 with the oil market. This was the beginning of the pandemic and oil demand fell off a cliff. So people who already had oil couldn't move the oil they had and thus had no room to take delivery of oil they'd already bought (via futures). Producers only have so much storage room before they have to shut off production. Side note: Gulf producers have had to do this in the last month.
But the net effect was there was all this oil and nowhere for it to go so for a brief period the price went negative. That's right. Producers were paying you to take oil. That was an extreme contango market.
So in the last month I've heard data points like Dubai crude was $120-130 paper and $178 physical. That's a huge margin. I don't know what the normal range is really. In a healthy market you'd expect physical prices to be pretty near to short-term future prices.
In any bullish market, you'll get hoarders. There are limits to what you can store though and those are very real because if you shut off production, you might still be accuring a lot of costs and it can take days to restart production. As such I think you'll find producers generally just want to sell.
But a lot of hedging goes on too. This can make price spikes worse, actually. Now it's pretty common for US oil producers to not drill a well until they've already sold part or most of the oil it's expected to produce on the futures market, for risk purposes. But in times like now, nobody's going to drill a well to sell at a future price of $70 (which the 1 year price might still be) and because there's a lead time on oil production, this can create future shortages.
> or example, a few weeks ago, physical Dubai oil was nearing $180 per barrel. West Texas crude had a future price of $110 yet the physical price was $140+.
Surely if this were true, gas prices would have risen more than they did.
>But this means talking heads are reporting on $110 oil when it's really $150.
It's pretty normal that futures differ from spot prices.
>In previous years, some or all of these people would get investigated and prosecuted by the SEC for insider trading.
But are there proofs that there is insider trading on oil futures and we know CTFC isn't investigating it?
Come to think of it, what insider trading in oil even is…? Oil isn’t a company and doesn’t have any capacity for material non-public information. The biggest players are all insiders on this market anyway. Why should Barron be prosecuted and Trafigura not…?
everyone is assuming this is americans but what if it iranians or israelis or pakistan people . is not just white house cabinet in these rooms
Just imagine how bad insider trading is on other markets. Stricter laws and crack downs should be implemented globally.
Once upon a time, people went to jail for insider trading on the stock market. Like that was an actual thing that was enforced with rigor.
I guess it makes our betters like Peolosi look bad though.
The insiders are the ones writing the laws though.
Or just don't gamble on a bet where insider swings can act against you. Simple.
Is there really that much liquidity in these bets? Polymarket is just a broker right? So people are putting up tens of millions cumulatively on the other side of these random bets?
I wonder the same thing: who is taking the other side of these bets?
Probably not institutions, so it’s just retail gambling against insiders?
On prediction markets there are plenty of inefficiencies; e.g. an MM could take both sides of the bet when odds don’t add up to 1, which apparently happens more often than we all think
The only business at which Trump has ever really succeeded is money laundering. That might be a clue as to what is actually going on.
Is this really true? What is the evidence that Trump succeeded in money laundering, where is the dirty money coming from in these particular bets, and how do you propose the polymarket betting mechanism is able to clean the money?
A2: I don’t know. It would be great if the Department of Justice or Treasury investigated the matter, since the SEC no longer has the capability. However, since the interim Attorney General is a simp who expresses his love for the president repeatedly, that’s unlikely.
A3: Polymarket could make an effort to prevent activity that undermines the integrity of their platform. All betting platforms work to detect the use of the platforms by people like
Baseball players and their families. Most public employees names are public, so it should not be impossible to do the same.
The fact that obvious behavior like this happens reflects poorly on the platform. It’s pretty incredible that bettors are stupid enough to use a platform that actively undermines their wagers.
Thanks. A1 and A2 didn't answer my questions except that I think you're saying that you are not sure if any it is true or not. I was hoping for something substantive beyond the usual conspiracy theorizing.
On A3, money laundering doesn't mean hiding financial activity from the court of public opinion, it means to take an illegal income and put it through processes that obfuscates its origin and makes it difficult for law enforcement to notice or investigate so it can be used in legal markets. "Gambling" doesn't just clean money. Polymarket is electronic and the source and destination of transactions could be subpoenaed. That misconception probably comes from physical casinos where a person would walk in with cash and walk out with a receipt for chips and claim gambling earnings. Doesn't work when you have a paper trail in and out.
It would be stupid to the point of ridiculous to try to launder money this way, even from Trump, lol. Especially on such visible trades! Much more likely it's just making money from insider bets, because that is seemingly not illegal for prediction markets. If you were going to try to use this thing to launder (which seems ridiculous in the first place but maybe it's possible) you would do it with much more mundane bets surely.
> The fact that obvious behavior like this happens reflects poorly on the platform. It’s pretty incredible that bettors are stupid enough to use a platform that actively undermines their wagers.
Gambling is or can be a terrible mental health problem. Stupidity - arguably yes, but also an addiction. Which makes profiting from it pretty awful too really. Although regulations have struggled with how to deal with it because internet and black market gambling is so lucrative and easy to set up too unfortunately.
> how do you propose the polymarket betting mechanism is able to clean the money?
I would assume that dirty money (from dirty wallets) is placed on the "losing side" of the bet. And clean accounts take the "winning side" of the bets.
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I wonder if this sort of corruption will become a new negotiation tactic.
Give us what we want and we'll delay the announcement long enough for you to make preparations.
I don't know how Polymarket works, so maybe you can enlighten me: can Polymarket be subpoenaed to provide the recipients of the payouts? Is there some insulation to keep them ignorant of their identity?
There is a reason they deal in crypto and are not headquartered in the US
New York is suing them for access as they have the ability to regulate gambling.
The federal government is fighting this attempts, backing the company’s assertion that a “prediction market” is not gambling, and the Feds have sole regulatory power. Coincidentally, Donald Trump, Jr is an investor in Polymarket and an advisor to Kalshi.
Can someone articulate what the harm of this is?
Ignoring the gamblers losing money because they lack insider information, the harm is that you changed the incentive for war. It is motivated by money for the gamblers, not military or political objectives. The difference between this and rigged sports gambling is that people die. They die on a whim and they die unnecessarily. I shouldn’t have to explain why people dying is bad.
It’s more a sign of corrupt and morally bankrupt leadership, which should be alarming enough by itself.
It's a rigged game. If there's a bet that player X will foul player Y, without proper safeguards, player X can bet on himself and then intentionally player player Y. The actual harm is that by the rules of the betting, no one should know the outcome who could also bet on the game, so the losers are being robbed of their money.
In this particular context, it's also possible that there are illicit transfers of money without being immediately noticeable. Bribery could happen at the highest levels with it being very difficult to trace and prosecute.
If you have been under a rock for the last decade and a half, as it would appear you have, cryptocurrency already facilitates anonymous or near-anonymous transfer of money if executed correctly. It grants freedom in this way from oppressive people like you who seek to take it away.
Your powers of deduction leave much to be desired. You might want to try a job in retail to fully exercise your mental capabilities.
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Like any insider trading you are transferring money from the public to yourself. More interestingly for the prediction market angle: you are leaking secret information by doing that. If you make big trades in anticipation of specific events other market participants can see it. That could be extremely serious if say it endangers a military operation.
If an insider, say a member of the Department of Defense (or War, duh) bets a certain date: they could internally influence the decision to execute on that date rather than possibly a better (earlier?) date that could yield less damage or loss to either side.
Corruption, especially blatant corruption like this undermines credibility in institutions.
The fact we’re talking about this is a testament to the low standard of integrity and and morality we carry as a whole.
To me it looks like this:
If you are not an insider with special info and special access, no matter what you do in the market, you eventually lose to the insiders. So, if you blur the details a bit, you're just giving your money to these people.
The rational move would be to just not participate in a market where insider trading happens. I don't really understand why people aren't avoiding these markets like the plague.
Insiders fleecing dumb people. Then dumb people get pissed their finances are destroyed and they'll never pay off their debt or support a family or attract a mate, and so they go down a rabbit hole of insanity and depression on social media, getting conned by influencers and AI slop and then vote for whatever the rage du jour some grifter politician is selling, or worse they shoot up a school...
2026, yeah baby!
It can be said that Trump's "tweets" on that day were strategically engineered to first bring this bet to near zero before ultimately bring it to a hundred. In this way, the maximum winnings could be made by someone with insider knowledge.
I've tried to have sympathy for people who lose money gambling but I just can't. Maybe some argument can be made for the fool who loses money on something silly like a sports game, but people certainly not for people trying to make a buck off of death an destruction.
Often people are under such mental pressures that the chance of a better financial outcome is more mentally digestible than the existing scenario they are in. Considering it from that perspective has allowed me to understand and empathise with the gambler. However irrational or unlikely a sliver of hope, it is a chance at hope nonetheless.
There's a saying in poker that if you sit down at the table and can't immediately find the donkey(1), you are the donkey. At some point, anyone playing around in a prediction without insider info will be the donkey.
1: https://en.wikipedia.org/wiki/Glossary_of_poker_terms#donkey
Yes, and let me add that that's by design. Prediction markets' main function is to incentivize people with private information to make it public.
We get it but what good is it if the insiders come and bet mere hours before the event happens? So we could have known a few hours early? I feel like this is just people trying to justify gambling. In the UK bookies have been doing this forever, it's nothing new. It's just gambling.
How does making a wager cause insider info to be public? All it means is an anonymous account placed money on the outcome, how does it make public anything that an insider knows? It doesn’t.
It incentives them to keep the info secret in order to profit or a wager on a related outcome. The insider info remains secret, all people know is some bloke stood up a new account and placed a big bet.
And for these short timespan bets, it seems utterly useless. If the wagers were only allowed on things two weeks out, and not allow bets on short term events then maybe it could show more info.
The price movement is the indicator that there is insider information.
Of course there are lots of problems with this theory - in large markets a single trader has to make large bets to move the market, and with the current leadership the price moves large amounts unpredictably as well based on the latest statements.
But the mechanism itself makes sense.
It's unclear if that's a good thing. Of course some people know secret information before hand. Is disclosing that always good?
Arguably it’s a very useful property of prediction markets as long as everyone is aware that’s the case.
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Can someone explain to me how we haven’t regulated the hell out of the clearly illegal sector of betting on shit that can clearly be insider-traded with little to no scrutiny?
Leaders? Are you awake at the wheel?
Does it need to be regulated? This isn’t pension funds placing bets risking people’s investment money.
People using Polymarket are gambling on pretty random things and must understand the risk , whether it is on major geopolitical events or someone counting cars going through a junction these events can all be manipulated pretty easily.
People want to gamble on random things? Let them.
If anything is regulate the other side, people in government can’t use sites like polymarket because I don’t want them making stupid decisions so bets fall one side or another.
Who do you think places those bets
The leaders are the ones profiting from it.
Because they're the ones doing it and they have the power? Sorta inevitable outcome of markets in everything, really.
I mean... insiders are betting on war crimes. Yes, the insider betting is bad but it doesn't even touch the edges compared to committing war crimes. And if the government is committing war crimes, why would they care about something so inconsequential as betting on them?
They’re the ones doing it lol
I wanted to reply, but I think I just don't understand your comment at all.
Are you saying the "sector of betting on shit that can clearly be insider-traded" is illegal? Does that include like gold and S&P500?
The way I see it, prediction markets' main function is to connect gamblers with insiders posessing useful information. Are you concerned for the gamblers losing? But they were gonna lose anyway, one way or the other. Or are you concerned about the insiders winning? Sucks, but at least the public gets information by way of the prediction market being more accurate.
Please Explain how a last minute insider info bet helps the public in any way or fashion aside from fleecing fools of their money?
Nobody is forcing anybody to place the bets, but if you see credible money flows into eg. Middle East cease fire bets, you can decide to fill up your tank today, or not. We can’t think for you here, if you don’t see anything useful in the price then it’s time to educate yourself until you do. You should consider these bets more trustworthy than any news you read in mainstream media. There might even be a way to fund journalism here, though ethics are quite muddy indeed.
And what makes you believe that those (basically) peanuts that get bet are the real indicators?
The insiders might as well run a backroom prediction market and just manipulate the public market.
And even with bigger sums: you never know if it isn't just a variant of the shell game. There are no real signals.
> as records show substantial bets
They're not bets anymore. Now they're swaps.
Given the accused breaking of ceasefire shortly after agreement, not sure how this bet really gets paid out.
There were people who bet against… if there’s no one on the other side to take the opposite bet, you don’t have a bet. And you won’t get a payout.
I think the question was: Who gets the payout? The bet is: There will be a ceasefire. There was a ceasefire, but it was allegedly broken almost immediately after. So does that count as ceasefire or not? There are arguments for both sides, so you could also say it's a tie and neither party gets the cut and the bets will be refunded.
You can just read the rules for that particular prediction on Polymarket yourself. In this case according to the rules it just comes down to whether or not there is an official ceasefire by a particular time. It does not say anything about what happens if the ceasefire is broken after that time so in that case it doesn't actually matter that it was broken.
Usually the market have rules that define the bet more concretely than just "there will be a ceasefire", and resolutions can be disputed where they will be arbitrated by the market operator. For this particular market you can see that here (https://polymarket.com/event/us-x-iran-ceasefire-by), but I'll paste the current text too:
So the real answer is, "whoever the market operator chooses".This seems to involve there being an agreement in place, but not necessarily in effect or even followed, so the possibility of it having already been violated seems to be irrelevant
They put a lot more thought into the terms than the Trump administration did, that's for sure.
Still: does the combination of a deranged Truth Social posting, an obviously-pasted tweet from the Pakistani government, and a 10-point list of debatable provenance count as "clear public confirmation?"
I guess so, sort of, maybe? Fortunately I don't have a 7-figure wager at stake.
and there are always fool in market.
So I follow the oil and gas industry and markets. For anyone that doesn't know, commodity markets mostly operate two different markets: futures and spot. Futures contracts are an agreement to deliver (or take delivery, depending on which side you're on) a certain quantity of a standardized commodity at a given date. Futures markets tend to be a mix of speculators (who are simply betting on price movements of the underlying) and traders who produce or want the underlying. The advantage of a futures contract is it can allow someone to hedge their costs and lock-in prices. All sorts of producers and industries use them for that.
Oil futures are standardized into several standard types (9 I think, I might be off). You will hear terms like West Texas crude and Brent. This refers to two main factors: the relative mix between lighter and heavier hydrocarbons (called the API gravity) in the oil as well as the sulfur content.
One side benefit of all this is discovery. It's a way of measuring sentiment. So if future oil prices rise, it indicates market sentiment is negative about the war and they further disruption is expected. When it looks like hostilities may end, the price drops.
But there's a problem: nobody trusts the market anymore. It's being manipulated as insiders are clearly frontrunning news with massive bets, sometimes minutes before news gets released. This has been happening with other markets too, most notably SPY futures. Markets cease to function once manipulation becomes widespread.
The future price is also called the paper price and another signal that the paper price is meaningless is that the spot or physical price for oil has skyrocketed well beyond any oil prices you might see in the news. For example, a few weeks ago, physical Dubai oil was nearing $180 per barrel. West Texas crude had a future price of $110 yet the physical price was $140+.
An issue here is that the physical price isn't easily discoverable. It's hidden behind subscription services that cost thousands so you only hear about it when it's reported on. But this means talking heads are reporting on $110 oil when it's really $150.
We saw a similar mismatch with the silver market at the end of last year. That market too was clearly being manipulated but rather than insiders, many (including myself) suspect it was the refiners and others who had lost with silver's massive rally and were doing everything to pop the bubble, including changing the exchange's liquidity ratios to force sales.
In previous years, some or all of these people would get investigated and prosecuted by the SEC for insider trading. That agency has been defanged by putting a pro-deregulation loyalist in charge but the bigger problem is that some or all of these people will be buying pardons before the president leaves office. And the president can no longer be prosecuted thanks to the Supreme Court inventing presidential immunity.
One source of American power is the control over the global financial system. All of this insider trading risks dismantling that. It's not hard to find people who are sitting out because they simply don't trust anything anymore. If this spreads to financial institutions and institutional traders, that's going to be a big problem.
So-called "prediction markets" (and crypto) are even less regulated than that. Unless you have insider knowledge or you're betting on something that isn't prone to insider information (and I honestly don't know what that would be), I'd stay away.
And these prediction markets are small fry. SPY futures are a significantly larger market. So is oil and gas. And Treasuries is order of magnitudes bigger than either of those. Yet some of those markets can't be trusted and I suspect this is only going to get worse.
I don't have any hope that anyone will ever be prosecuted for any of this.
> That agency has been defanged by putting a pro-deregulation loyalist in charge but the bigger problem is that some or all of these people will be buying pardons before the president leaves office. And the president can no longer be prosecuted thanks to the Supreme Court inventing presidential immunity.
This is not a "bigger problem".
> the president can no longer be prosecuted thanks to the Supreme Court inventing presidential immunity
In 2015, there were a hundred things you could've inserted into "The US cannot ___" or "The POTUS cannot ___", that have happened since. Things "can't" until they can.
> I don't have any hope that anyone will ever be prosecuted for any of this.
Agreed, but this is _solely and entirely_ due to a lack of will to do so, not because of any laws.
Thank you for the thoughtful analysis. I'd echo that the deregulation and corruption of these markets has two impacts: 1) less "legitimate" (non-corrupt) capital flowing to these markets which may ultimately reduce the liquidity and value of the asstrs. 2) more speculative deployment of capital, which means that capital is used for making bets rather than uses for productive purpose (such as investing in legitimate investments that are productive for the economy.
Why would a insider invest in legitimate, productive investment when they can make outsized gains in betting markets or corrupt futures markets?
And yes, long term this will massively taint the US financial power and make economies like the UK more appealing.
I find it very hard to understand why so many people and institutions are still participating in markets that are obviously full of insider trading. It's basically just giving money away to the insiders. Why do people do this?
Institutions do not stake their own money and are somewhat averse to the direction of the market. As for common people, they're generally not known to do the most rational thing.
You're a fund manager. What's the alternative? Throw your hands up and tell your customers to take all their money back, you don't want to get paid anymore?
Exactly. Barter is super insanely expensive in comparison with the most manipulated paper markets; thus, if you closed the current markets, the participants would be very highly incentivized to create a new one, which would likely be worse on all accounts.
As a tick jockey myself, reading futures markets are like reading tomorrow’s NYT headline. These markets portend events with uncanny accuracy.
spend more time on twitter. nyt is just twitter 16 hours late
I think you misunderstand. His comment about futures markets is equivalent to your comment about twitter. Neither of you are getting your news from NYT.
Futures are sometimes informed hours earlier than Twitter was the point
Imagining that hurricane prediction cone they put on maps, Twitter encompasses the entire cone and then some. Someone on Twitter is gonna be right, but rarely the same person consistently.
Dumb point, but you said SEC. But they don't have authority over commodities, and aren't the rules different for them anyway?
Other than that, I think a lot of what you said was interesting.
You are correct: the CFTC has primary authority over commodities and futures. I'm glad you pointed this out because in looking up who it was I learned that the cFTC (not the SEC) has regulatory authority over prediction markets too. That was new information.
This made me curious: who regulates sports betting? And the answer seems to be... nobody. Well, the states. I guess I should've known that because I know some states ban sports betting.
But that's interesting compared to prediction marekts. Since they're federally regulated, states don't have as much control. And I see that the current CFTC commissioner is suing states to block prediction markets. And prediction markets can and do allow sports betting.
Another "win" for dual sovereignty.
What is a typical price difference between the paper and spot prices? 1% or 10%+ is common? In the past 24 hours, the futures price dropped a huge amount. Is the spot market dynamic enough that prices can get reflected so quickly? Where does it stand in the past few days?
It is also interesting to think about the game theory on how you respond to markets during volatility. If you are a producer or have excessive storage capacity - when do you sell? From my armchair position, it seems like conditions are only going to get worse. Do you hold back some reserves, hoping to cash in on a higher pay day in the future? Then you have to wonder how many might be doing the same.
This is hard to say because physical delivery prices aren't easily discoverable (as mentioned).
Here's one way it matters though. Futures markets are typically in a state of backwardation or contango. Backwardation simply means the spot (or physical) price is higher than the paper or future price. Contango is the opposite. Whichever one it is, says something about the current market and the expectations for the future.
So the silver market was in backwardation where the paper price was $75+/oz but the physical price might've been $100+ but nobody was buying. People with silver delivery obligations were simply borrowing silver from those who had it rather than buying it on the spot market. There's a whole separate market for borrowing commodities and the premiums soared. But people who had shorted silver simply couldn't afford to buy on the spot market without going broke so they didn't. They kicked the can down the street, borrowed and then lobbied for the exchange to pop the bubble (which they did).
The best example of a contango market was in March-April 2020 with the oil market. This was the beginning of the pandemic and oil demand fell off a cliff. So people who already had oil couldn't move the oil they had and thus had no room to take delivery of oil they'd already bought (via futures). Producers only have so much storage room before they have to shut off production. Side note: Gulf producers have had to do this in the last month.
But the net effect was there was all this oil and nowhere for it to go so for a brief period the price went negative. That's right. Producers were paying you to take oil. That was an extreme contango market.
So in the last month I've heard data points like Dubai crude was $120-130 paper and $178 physical. That's a huge margin. I don't know what the normal range is really. In a healthy market you'd expect physical prices to be pretty near to short-term future prices.
In any bullish market, you'll get hoarders. There are limits to what you can store though and those are very real because if you shut off production, you might still be accuring a lot of costs and it can take days to restart production. As such I think you'll find producers generally just want to sell.
But a lot of hedging goes on too. This can make price spikes worse, actually. Now it's pretty common for US oil producers to not drill a well until they've already sold part or most of the oil it's expected to produce on the futures market, for risk purposes. But in times like now, nobody's going to drill a well to sell at a future price of $70 (which the 1 year price might still be) and because there's a lead time on oil production, this can create future shortages.
> or example, a few weeks ago, physical Dubai oil was nearing $180 per barrel. West Texas crude had a future price of $110 yet the physical price was $140+.
Surely if this were true, gas prices would have risen more than they did.
>But this means talking heads are reporting on $110 oil when it's really $150.
It's pretty normal that futures differ from spot prices.
>In previous years, some or all of these people would get investigated and prosecuted by the SEC for insider trading.
But are there proofs that there is insider trading on oil futures and we know CTFC isn't investigating it?
Come to think of it, what insider trading in oil even is…? Oil isn’t a company and doesn’t have any capacity for material non-public information. The biggest players are all insiders on this market anyway. Why should Barron be prosecuted and Trafigura not…?
everyone is assuming this is americans but what if it iranians or israelis or pakistan people . is not just white house cabinet in these rooms
Just imagine how bad insider trading is on other markets. Stricter laws and crack downs should be implemented globally.
Once upon a time, people went to jail for insider trading on the stock market. Like that was an actual thing that was enforced with rigor.
I guess it makes our betters like Peolosi look bad though.
The insiders are the ones writing the laws though.
They aren't looking to prosecute many people https://www.reuters.com/legal/government/us-sec-says-it-file...
Or just don't gamble on a bet where insider swings can act against you. Simple.
Is there really that much liquidity in these bets? Polymarket is just a broker right? So people are putting up tens of millions cumulatively on the other side of these random bets?
I wonder the same thing: who is taking the other side of these bets?
Probably not institutions, so it’s just retail gambling against insiders?
On prediction markets there are plenty of inefficiencies; e.g. an MM could take both sides of the bet when odds don’t add up to 1, which apparently happens more often than we all think
The only business at which Trump has ever really succeeded is money laundering. That might be a clue as to what is actually going on.
Is this really true? What is the evidence that Trump succeeded in money laundering, where is the dirty money coming from in these particular bets, and how do you propose the polymarket betting mechanism is able to clean the money?
A1: https://www.theusconstitution.org/litigation/trump-v-deutsch...
A2: I don’t know. It would be great if the Department of Justice or Treasury investigated the matter, since the SEC no longer has the capability. However, since the interim Attorney General is a simp who expresses his love for the president repeatedly, that’s unlikely.
A3: Polymarket could make an effort to prevent activity that undermines the integrity of their platform. All betting platforms work to detect the use of the platforms by people like Baseball players and their families. Most public employees names are public, so it should not be impossible to do the same.
The fact that obvious behavior like this happens reflects poorly on the platform. It’s pretty incredible that bettors are stupid enough to use a platform that actively undermines their wagers.
Thanks. A1 and A2 didn't answer my questions except that I think you're saying that you are not sure if any it is true or not. I was hoping for something substantive beyond the usual conspiracy theorizing.
On A3, money laundering doesn't mean hiding financial activity from the court of public opinion, it means to take an illegal income and put it through processes that obfuscates its origin and makes it difficult for law enforcement to notice or investigate so it can be used in legal markets. "Gambling" doesn't just clean money. Polymarket is electronic and the source and destination of transactions could be subpoenaed. That misconception probably comes from physical casinos where a person would walk in with cash and walk out with a receipt for chips and claim gambling earnings. Doesn't work when you have a paper trail in and out.
It would be stupid to the point of ridiculous to try to launder money this way, even from Trump, lol. Especially on such visible trades! Much more likely it's just making money from insider bets, because that is seemingly not illegal for prediction markets. If you were going to try to use this thing to launder (which seems ridiculous in the first place but maybe it's possible) you would do it with much more mundane bets surely.
> The fact that obvious behavior like this happens reflects poorly on the platform. It’s pretty incredible that bettors are stupid enough to use a platform that actively undermines their wagers.
Gambling is or can be a terrible mental health problem. Stupidity - arguably yes, but also an addiction. Which makes profiting from it pretty awful too really. Although regulations have struggled with how to deal with it because internet and black market gambling is so lucrative and easy to set up too unfortunately.
> how do you propose the polymarket betting mechanism is able to clean the money?
I would assume that dirty money (from dirty wallets) is placed on the "losing side" of the bet. And clean accounts take the "winning side" of the bets.
I wonder if this sort of corruption will become a new negotiation tactic. Give us what we want and we'll delay the announcement long enough for you to make preparations.
I don't know how Polymarket works, so maybe you can enlighten me: can Polymarket be subpoenaed to provide the recipients of the payouts? Is there some insulation to keep them ignorant of their identity?
There is a reason they deal in crypto and are not headquartered in the US
New York is suing them for access as they have the ability to regulate gambling.
The federal government is fighting this attempts, backing the company’s assertion that a “prediction market” is not gambling, and the Feds have sole regulatory power. Coincidentally, Donald Trump, Jr is an investor in Polymarket and an advisor to Kalshi.
Can someone articulate what the harm of this is?
Ignoring the gamblers losing money because they lack insider information, the harm is that you changed the incentive for war. It is motivated by money for the gamblers, not military or political objectives. The difference between this and rigged sports gambling is that people die. They die on a whim and they die unnecessarily. I shouldn’t have to explain why people dying is bad.
It’s more a sign of corrupt and morally bankrupt leadership, which should be alarming enough by itself.
It's a rigged game. If there's a bet that player X will foul player Y, without proper safeguards, player X can bet on himself and then intentionally player player Y. The actual harm is that by the rules of the betting, no one should know the outcome who could also bet on the game, so the losers are being robbed of their money.
In this particular context, it's also possible that there are illicit transfers of money without being immediately noticeable. Bribery could happen at the highest levels with it being very difficult to trace and prosecute.
If you have been under a rock for the last decade and a half, as it would appear you have, cryptocurrency already facilitates anonymous or near-anonymous transfer of money if executed correctly. It grants freedom in this way from oppressive people like you who seek to take it away.
Your powers of deduction leave much to be desired. You might want to try a job in retail to fully exercise your mental capabilities.
Like any insider trading you are transferring money from the public to yourself. More interestingly for the prediction market angle: you are leaking secret information by doing that. If you make big trades in anticipation of specific events other market participants can see it. That could be extremely serious if say it endangers a military operation.
Both https://en.wikipedia.org/wiki/Conflict_of_interest and https://en.wikipedia.org/wiki/Insider_trading when people able to influence outcomes are able to bet on those outcomes.
If an insider, say a member of the Department of Defense (or War, duh) bets a certain date: they could internally influence the decision to execute on that date rather than possibly a better (earlier?) date that could yield less damage or loss to either side.
https://paulkrugman.substack.com/p/treason-in-the-futures-ma...
Corruption, especially blatant corruption like this undermines credibility in institutions.
The fact we’re talking about this is a testament to the low standard of integrity and and morality we carry as a whole.
To me it looks like this:
If you are not an insider with special info and special access, no matter what you do in the market, you eventually lose to the insiders. So, if you blur the details a bit, you're just giving your money to these people.
The rational move would be to just not participate in a market where insider trading happens. I don't really understand why people aren't avoiding these markets like the plague.
Insiders fleecing dumb people. Then dumb people get pissed their finances are destroyed and they'll never pay off their debt or support a family or attract a mate, and so they go down a rabbit hole of insanity and depression on social media, getting conned by influencers and AI slop and then vote for whatever the rage du jour some grifter politician is selling, or worse they shoot up a school...
2026, yeah baby!
It can be said that Trump's "tweets" on that day were strategically engineered to first bring this bet to near zero before ultimately bring it to a hundred. In this way, the maximum winnings could be made by someone with insider knowledge.
I've tried to have sympathy for people who lose money gambling but I just can't. Maybe some argument can be made for the fool who loses money on something silly like a sports game, but people certainly not for people trying to make a buck off of death an destruction.
Often people are under such mental pressures that the chance of a better financial outcome is more mentally digestible than the existing scenario they are in. Considering it from that perspective has allowed me to understand and empathise with the gambler. However irrational or unlikely a sliver of hope, it is a chance at hope nonetheless.