The post Why real-time election odds are misleading prediction market crypto traders appeared on BitcoinEthereumNews.com.
You can be right about who will win an election and still pay too much to bet on it. On prediction markets, the price available when you open the app may be gone by the time you try to buy, especially when news sends other traders rushing toward the same outcome. It took very little time for the market to see a business opportunity in this. On Sept. 9, DoubleZero announced that it had added Kalshi’s election and politics markets to Edge, a service designed to deliver trading data over a dedicated network. It carries the exchange’s order book, showing the prices and quantities people are willing to buy and sell. DoubleZero told CryptoSlate that faster, more dependable information can help professional trading companies offer better prices. If competition passes those savings to customers, ordinary bettors could benefit. But using the feed effectively requires software and money, giving well-equipped companies another way to compete with people placing bets on their phones. Election betting seems to be the great equalizer for both professional trading companies and retail users. Some participants want to back a political judgment for months; others want to profit from the next movement in price. Faster data serves that second business particularly well. What happens between the prediction and the payout On Kalshi, a standard yes-or-no contract pays $1 if its outcome happens and nothing if it doesn’t. Buy a yes contract for 60 cents, and you’re risking 60 cents for a potential 40-cent profit before fees. The price is commonly interpreted as roughly a 60% probability, though costs and trading conditions can erode that number quite a bit. You can also sell before the election. Suppose you buy 1,000 contracts at 60 cents and sell them at 65 cents. Provided both trades execute at those prices, you’ve earned…