The contrarian bet is fun but I wonder how it actually holds up. Prediction markets do tend to overprice dramatic outcomes, so "always bet no" isn't as dumb as it sounds. Would love to see real P&L over a few months, not just the thesis.
traderj0e 4 minutes ago [-]
I've backtested this kind of strategy, and it had a good return (like 100% APR), but then I realized it's "cheating" by knowing when things are going to resolve. Often times it's not clear. Your return depends a lot on how quickly you can get your money out.
Also requires a lot of volume to be "predictable" obviously, since 1 loss sets you back 10-20 wins. Scare quotes around "predictable" because you never know if others will use this strat or a lot of unlikely events will happen due to insiders.
baq 2 minutes ago [-]
> One loss sets you back 10-20 wins.
didn't look at the numbers, but this one sentence reminds me of selling options for 'passive income' (don't do that)
traderj0e 52 seconds ago [-]
It's actually kinda like that. The gamblers are taking a "loan" from you.
Basically arbitraging human imagination. People love coming up with fantastical concepts because they get attention, but the more exciting a market is, the less likely it is to actually happen. Reality is usually boring.
suzzer99 11 minutes ago [-]
My general observation is that people tend to underestimate the likelihood of black swan events (covid, financial crisis) even as it's pretty obvious they're happening. And then when they do accept it, they react too far the other way and assume it's never going to end.
I've had success playing the markets in these specific cases. I did fritter away a lot of my gains from the financial crisis thinking I was a genius market timer. But I learned my lesson and didn't waver once I jumped back in after covid.
In both cases I got out before a bulk of the crash and timed the bottom almost to the day. Lucky I know, but I had reasons for both. For the financial crisis it was when Bill Fleckenstein closed his bear fund and put it all in MSFT. For covid it was when it looked like the lockdown was working and NYC hospitals weren't going to completely fall over like Northern Italy or Wuhan.
For any non black-swan scenarios, I assume I'll never get one up on the masters of the universe and just leave everything in blended age-appropriate funds.
I'm very concerned about an AI crash and the future of white collar work in general. But it feels more like a slow death to me than a black swan. So I'm just hedging with bonds and cash and stocks that hopefully don't crash as hard in a recession.
nemomarx 55 minutes ago [-]
This makes sense to me, but isn't there a risk of increasing the potential payoff high enough that someone is motivated to go out and make the yes side happen?
Consider this bot running on us military outcomes or something.
cryptonym 50 minutes ago [-]
By design it's a game where people with inside knowledge or enough power to bend reality can steal money from people with gambling addiction. Automating your addiction might not be the best move.
nkrisc 4 minutes ago [-]
This is what markets like Polymarket boil down to. Normies can't win. Some will, of course, but that's just chance and there's no way if ensuring it's you.
It's really no different than a casino: if you ever find yourself with more money than you walked in with, cash out and leave.
Best strategy for most people though is to simply not participate and you'll break even.
Spooky23 44 minutes ago [-]
You're thinking like an engineer and making the laughable assumption that "prediction markets" are markets. It's totally unregulated with all sorts of grifts and cheats. One of the platforms was promoting a high-return bet against Rory at the Masters yesterday.
You can make money off of all sorts of stuff. You can "sell" the bets, so there's lots of live pump and dump.
We've gone full circle. The bookie with no neck that smelled like onions was more honest than these platforms.
jazzpush2 21 minutes ago [-]
Well, that's why things aren't priced uniformly, isn't it?
hodder 40 minutes ago [-]
Basically, realized vol is lower than implied vol over time. Yes.
swyx 2 minutes ago [-]
also people overpay for skew protection and you can make consistent money selling skews (until that one time it blows up on you)
throwaway2027 55 minutes ago [-]
Already priced in.
m-hodges 44 minutes ago [-]
The author also noted:
> yes this has to buy below 0.73 long term, the bot has a configurable ceiling set at 0.65 and checks for new markets buying closer to .5
What other question would you like to be backtested? This one is fairly easy
gruez 36 minutes ago [-]
What happens if you flood the market with a bunch of implausible bets like "sun won't rise tomorrow"? Sure, you might try to filter that out with some sort of "seasoning" period (ie. don't buy new markets), but then that means more time for arbitrageurs to correctly price the market, depriving you of any price advantage you might have had.
baq 36 minutes ago [-]
jane street is always hiring!
jp57 46 minutes ago [-]
Except that the mere existence of the market with the question posed for people to consider, probably activates the availability heuristic[1], causing people to overestimate the likelihood.
That logic doesn't work because not every bet have even payouts. If there's a market for whether a dice rolls 1 or not, the odds might resolve to "no" 83% of the time, but if it only pays you $1.1 per dollar wagered on "no", you're still losing money.
43 minutes ago [-]
44 minutes ago [-]
thatnerd 55 minutes ago [-]
I think we've collectively DDoSed it. I'm getting a 504 timeout.
The author [page](https://github.com/sterlingcrispin) is there on github, but I can't even find his full list of his repos to confirm it's still there (I also get a 504 on that).
nothinkjustai 52 minutes ago [-]
GitHub is down yet again. Guess they forgot to tell their AI “make no mistakes” while vibecoding.
aprilnya 29 minutes ago [-]
I was about to say “first Microsoft service to reach zero 9s of uptime”, but then I realized, it’s Microsoft… GitHub is definitely not the first
thetailrisk 49 minutes ago [-]
What's the data situation like if you wanted to backtest a model like this? Is it easily accessible?
croemer 14 minutes ago [-]
No, data situation is bad, at least for market making - you need to scrape the orderbook yourself to be able to do any realistic backtesting. And even then, it's hard to know whether other bids at the same price are ahead of you or behind you in the queue.
imrozim 4 minutes ago [-]
[dead]
ivatalon 28 minutes ago [-]
[dead]
nzach 36 minutes ago [-]
If this seems interesting for you remember that if you are putting $100 in a 99 to 1 bet you need to win 100 times to get $100 but only need to loose 1 time to loose $100.
And the chance of losing at least once in a 99% sure bet after 100 rounds is around 60%. Even if you reduce to 30 rounds it still is around 30%.
This may seem smart at first glance, but the math doesn't really checks out.
Rendered at 17:03:24 GMT+0000 (Coordinated Universal Time) with Vercel.
Also requires a lot of volume to be "predictable" obviously, since 1 loss sets you back 10-20 wins. Scare quotes around "predictable" because you never know if others will use this strat or a lot of unlikely events will happen due to insiders.
didn't look at the numbers, but this one sentence reminds me of selling options for 'passive income' (don't do that)
They admit no returns.
But it does seem like a fun project and nowhere does it say anything about returns or profits so not scammy imo just funny meme backed code
nice to see heroku still alive...
I've had success playing the markets in these specific cases. I did fritter away a lot of my gains from the financial crisis thinking I was a genius market timer. But I learned my lesson and didn't waver once I jumped back in after covid.
In both cases I got out before a bulk of the crash and timed the bottom almost to the day. Lucky I know, but I had reasons for both. For the financial crisis it was when Bill Fleckenstein closed his bear fund and put it all in MSFT. For covid it was when it looked like the lockdown was working and NYC hospitals weren't going to completely fall over like Northern Italy or Wuhan.
For any non black-swan scenarios, I assume I'll never get one up on the masters of the universe and just leave everything in blended age-appropriate funds.
I'm very concerned about an AI crash and the future of white collar work in general. But it feels more like a slow death to me than a black swan. So I'm just hedging with bonds and cash and stocks that hopefully don't crash as hard in a recession.
Consider this bot running on us military outcomes or something.
It's really no different than a casino: if you ever find yourself with more money than you walked in with, cash out and leave.
Best strategy for most people though is to simply not participate and you'll break even.
You can make money off of all sorts of stuff. You can "sell" the bets, so there's lots of live pump and dump.
We've gone full circle. The bookie with no neck that smelled like onions was more honest than these platforms.
> yes this has to buy below 0.73 long term, the bot has a configurable ceiling set at 0.65 and checks for new markets buying closer to .5
https://x.com/sterlingcrispin/status/2043685362812461436
What other question would you like to be backtested? This one is fairly easy
[1] https://philopedia.org/topics/availability-heuristic/
> Why predict the future when 73.4% of all Polymarkets resolve as No?
https://x.com/sterlingcrispin/status/2043398710013595857
The author [page](https://github.com/sterlingcrispin) is there on github, but I can't even find his full list of his repos to confirm it's still there (I also get a 504 on that).
And the chance of losing at least once in a 99% sure bet after 100 rounds is around 60%. Even if you reduce to 30 rounds it still is around 30%.
This may seem smart at first glance, but the math doesn't really checks out.