Like with this bot, I have no idea if that will still lead to actual positive returns. This might just be a remnant from a time when these betting lines were set less intelligently. But all things being equal, it seems logical that "boring" bets would have a better return in the long run than "exciting" bets as long as some betters are at least partially motivated by entertainment.
There's probably a lot of knowledge like this that sports betters have built up over decades that could apply to these new forms of non-sports gambling.
Here's how the mechanism works: I find that something is statistically worth $0.70 but I am able to buy it for $0.60 and statistically sell it for $0.70 (in the average). I make $0.10 each trade on average. Until you come along, copy my strategy and change $0.60 to $0.61 to frontrun my trades. Then someone else does it for $0.62. Until the market finally reprices to $0.70 where it should be. The guy who tries $0.71 loses money and stops, and then it goes back to $0.70. It's a stable feedback loop.
There are lots of positive EV strategies lying around in these inefficient markets that Citadel hasn't (yet) descended upon. The best advice I can give is if you find one, trade the hell out of it and don't open source it or tell anyone about it, because as soon as more people run it, it will cease to be positive EV and then after that it becomes an infrastructure game.
If it's popular on Github it probably doesn't work.
If you found something that works and is paying your rent, don't put it on Github. My 2 cents.
Your strategy doesn't work on sportbooks to begin with, because bookmakers don't move the odds with the action.
That is, there is no such phenomenon as "the over is exciting therefore overpriced". Bookmakers price purely based on facts and statistics. Their pricing isn't affected by excitement nor by how many people are betting a certain way.
If this were true, lines would never move unless there was breaking news, but we see lines move all the time without there being any material change to those "facts and statistics".
Yes, you can find positive EV trades on Wall Street as well. I've been diving into this a lot lately, all I can say is it's 10X harder to find strategies that work on Wall Street than prediction markets.
With one exception.
The one easy long-lasting anomaly to exploit on Wall Street which actually does NOT exist on prediction markets: "American stocks go up most of the time". This is actually a massively exploitable structural anomaly (you just buy and hold forever and effectively reap the rewards of a biased coin) and the source of the anomaly is mostly US monetary policy, US foreign policy, and US tech expertise put together. However, it still is an anomaly. The thesis that SPY will continue going up forever is also predicated on these things continuing to work the way they have in the past.
Also requires a lot of volume to be "predictable" obviously, since 1 loss sets you back 10-20 wins. It's surprisingly hard to find reasonable-liquidity markets after all your filtering. Many have huge spreads or thin books. 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.
Another thing, just like the author, I was excluding sports in all the above. Yes Polymarket is famous for letting people bet on world events etc, but turns out it's still more about sports. Betting on the overdog in sports markets seems more appealing because there are plenty of those events with large volume, they're kinda homogenous, you know exactly when they resolve, and they're harder to rig. I simply never got around to putting real time or money into the overdog strat.
didn't look at the numbers, but this one sentence reminds me of selling options for 'passive income' (don't do that)
Polymarket is also holding onto the money in the meantime. Idk what they do with it, but it's not like some other platforms where they at least work with a bank to earn you some tiny interest on it.
I think timing is the missing piece of this. Just randomly betting no on everything likely isn't going to give good results, but if you tied in a news API and just bet no on anything related to a major story right after the news starts picking it up, I would expect you could make a solid return.
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.
One of my go-tos on this is the Fukushima nuclear accident. IIUC there were plenty of folks in Japan who knew of the high risk. Perhaps many interested in nuclear energy outside of Japan, too.
But the average adult if asked about the prospect of a major nuclear incident occurring say, "tomorrow," would narrow their eyes in skepticism. There's almost an instinctual level seeding of doubt.
This can be a good thing. LK-99 was an excellent test of the dissonance from dramatic changes in reality and costs of inaccuracy.
The greatest VCs I have known are exceptional at suspending disbelief to test their ability to basically shape world building.
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.
It gives us normies a way to see what the powerful are thinking.
And, I'm not even contemplating gambling addiction. There's a huge market of people that just go to Vegas once or twice a year and come home thousands of dollars poorer. But they don't need it, they may not gamble outside of Vegas, or nothing that would signal an addiction.
If Polymarket were regulated like a casino, I’d actually have no problem with it.
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
What other question would you like to be backtested? This one is fairly easy
If you put all your money on no, you get 4% if you win, and if Jesus comes back and you lose, money won't matter.
Who does "you" refer to in this sentence? Polymarket itself?
I'm pretty sure if Polymarket itself decides it wants to screw you, you're gonna lose no natter what your strategy is.
(Manifold doesn't use real money, so there's more "free money" lying around waiting to be picked up than on most real-money markets)
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).
Same way Binance did [1]. Assuming they wouldn’t get charged.
> Restricted Jurisdictions. You acknowledge and agree that you are not permitted to access, use or trade with the Contracts on the Platform if you are residing in, a citizen of, organized in or located in the following jurisdictions (collectively, the “Restricted Jurisdictions”): Australia, Belgium, France, Germany, Italy, the Netherlands, Ontario, Poland, Quebec, Russia, Singapore, Taiwan, Thailand, the United Kingdom, the United States; or a jurisdiction or territory that is the subject of comprehensive country-wide, territory-wide, or regional economic sanctions by the United States, including but not limited to Iran, Syria, Cuba, North Korea, and the Crimea, Dontesk and Luhansk regions of Ukraine.
Maybe I'm supposed to ignore that?
nice to see heroku still alive...
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.
But they aren't independent there are a lot of correlations. Global geopolitics for example.
The way the math works out, 73% of markets resolve to No, If you buy No at 0.73 each time you would break even.
Not financial advice of course
Say 70% of the time it resolves to ‘no’, you still don’t make money by blindly choosing ‘no’.
Guess why?
Hint: This strategy is also described with the macabre analogy: picking up pennies in front of a steamroller.
Do you want to pick up pennies in front of a steamroller?
Though I agree it's bad math, even if 70% resolve to no, there's a high variance among all of them, and to know whether it's a good bet or not... you have to do your DD on that particular market. Even if you follow the Kelly criterion, randomly choosing bets will probably tank your bankroll sooner or later.
No, all these variables cancel out.
If you were picking and choosing, yes. But this approach is basically betting no on all the markets.
The textbook explanation of this is the central limit theorem, proving this mathematically is a bit more involved for power-law systems like this but it’s empirically valid.
https://huggingface.co/datasets/SII-WANGZJ/Polymarket_data
"A comprehensive dataset of 1.9 billion trading records from Polymarket, processed into multiple analysis-ready formats. Features cleaned data, unified token perspectives, and user-level transformations — ready for market research, behavioral studies, and quantitative analysis."
Nevertheless, Polymarket is a very interesting marketplace of sentiments and information, and it can be a very strong leading indicator of huge price movements in "real" markets like the NYSE, in part because it directly measures one factor of sentiment, i.e. whatever the prediction is about. Market sentiment determines market prices on very large and deep markets, too.
In the run-up to the election, when Trump was running against Biden, a betting market was a leading predictor of NASDAQ (a very deep, very liquid index of stocks). I wrote up the findings here: https://medium.com/@rviragh/does-the-stock-market-react-posi...
This indicator was the best one anyone has ever shown for NASDAQ for any signal, period. The signal was so strong it trumped all other signals and variances of any kind. Traders trading with just this signal and no other signal of any kind could have made practically an unlimited amount of money as long as the signal was intact. (Basically, until Biden dropped out.)
I myself didn't place any bet due to my role as a political advisor at the time, but the size of the correlation is still the biggest and most surprising one I've ever seen.
The stopped clock is right twice a day, but it reads noon and we're at half past three
I have been making money with a bot off a statistical anomaly in prediction markets lately. There is no way in hell I will open source it or tell you what that anomaly is because I have capacity back-tested it and there are so many players in the market; if all of HN and Github start downloading and use my code it WILL cease to work.
Put another way, your orders are helping move the market and price the market more efficiently; that's the market compensating you for pricing things better. If a thousand people run your strategy, prices will get moved to exactly the point where your strategy stops working. You effectively split that pie with a thousand people.
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
The bot has zero risk management and I have a strong disclaimer on the github it is essentially a meme.
73% of all polymarkets do resolve to No though.
There's a good dataset on huggingface if you wanted to do some data science
https://huggingface.co/datasets/SII-WANGZJ/Polymarket_data
You though, are claiming that the market is perfectly priced, or should be, such that this strategy won’t work. It’s pretty hard to balance the odds of an animal seeing their shadow vs the expected strike price of the nasdaq. It’s clear you’re not familiar with betting markets, which is in your best interest most likely, but that’s not how this works.
You’re arguing against yourself… against a point nobody made but you.
I bet the average price for a no bet across these markets is 73 cents.
From their docs, it looks like they charge fees to bet "takers" (as opposed to makers), but exclude the geopolitical and world-events markets where they don't charge fees.
I have to imagine that may be related to some of the blow-back towards prediction markets about profiting on topics like war & their potential for manipulation.
Given it sounds like the bot bets everywhere other than sports, many of those categories would likely have fees in this case.
Behavioral economics has already answered the question of whether humans are, on average, perfectly rational economic actors. They are not.
To the contrary, there is substantial evidence indicating a meaningful number of humans will mis-estimate the likelihood of uncommon future events.
The alternative would be that there's a bunch of free money sitting there waiting for someone to decide to pick it up, and nobody is, not even you.
Edit: conversely, if the average no costs _more_ than 73 cents, but the 73% of all polymarkets resolve to No, that would imply that an everything-always-happens strategy is profitable (neglecting slippage)
The whole premise of gambling is that they don't
https://knowyourmeme.com/memes/nothing-ever-happens
Successful project imo.
I wonder what it means exactly. Typical Polymarket looks like this:
X happens before May. [Yes][No]
X happens before June. [Yes][No]
X happens before July. [Yes][No]
...
So even if X ended up happens in December, it's still 12.5% Yes and 87.5% No?
So it's not a useful trading strategy. Good to know.
It might have worked out that the human tendency towards optimism biased the Yes side, but Polymarket is watched closely enough by traders that the pricing is apparently realistic.
Now if you could bet against minor crypto coins, which almost always go down... But if you could, there would be traders pricing them realistically. Everybody has analytics now, and mispriced markets are detected and exploited quickly.
I laughed. That's inspired. Quite the nerd-snipe as well, based on the rapidly accumulating threads on effectiveness, probabilities and markets.