Traders placed over $1B in perfectly timed bets on the Iran war

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.

In my opinion the entire prediction market is simply a way to legalize insider trading and war profiteering.

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.

There’s 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 don’t understand yet is how new markets are created. They aren’t user generated, so how did an “Iran strike” market exist to begin with?

Why wouldn’t the platforms require the identity of people cashing out more than, let’s 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.

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.

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.

These articles always focus on "Yes" bets. An insider betting "No" might get by completely unnoticed.

Why can’t the markets just forbid transactions that happen within 48 hours of resolution?

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.

It’s still shocking corruption and absolutely should be enraging. But that’s because it’s a 10s of millions dollar trade. Not a billion dollar one.

It’s not perfectly timed bets, it’s called insider trading.

Just one more thing this administration has brought into mainstream.

It’s all manipulation and everyone knows it but when the voices are coming from inside the house, who’s going to investigate? If anything every tech company in the whole flow is going to support and add custom flows for them - “to get on their good side”

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?

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?

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.

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.

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.

“Traders” it’s not the word I would use. Maybe traitors.

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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

According to the Guardian, clicking around on some websites.

I guess, how many not perfectly timed bets did traders bet on these things?

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 – or are involved in the funding of – 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 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.

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.

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

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".

Related:

Traders place $760M bet on falling oil ahead of Hormuz announcement

https://news.ycombinator.com/item?id=47812385

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.

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

Maybe a superhuman AI? /s

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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.