Hacker News: vcf

New comment by vcf in "Who wins and who loses in prediction markets? Evidence from Polymarket"

vcf — Fri, 22 May 2026 11:32:07 +0000

It's simpler when looking at prediction markets because of bounded payoffs and the zero-sum nature, so these are pure trading gains.

In equity markets, you have both the trading and investment components to account for. Market makers like Citadel don't invest; they aim to exit positions as quickly as possible to minimize risk and capital requirements. Long-term investors commit capital to risky assets and are compensated with a risk premium (expected to be positive, but it can turn out to be negative). Usually, the "cost" of liquidity paid by long-term investors is tiny related to the overall expected returns. In prediction markets, you don't have that.

New comment by vcf in "Who wins and who loses in prediction markets? Evidence from Polymarket"

vcf — Fri, 22 May 2026 11:22:30 +0000

Yes. It's not only that, as we also find very successful traders who take directional bets on elections and sports. But among the most successful traders, a large fraction are acting as market makers. Note that acting like one is not enough. We also find many traders acting as market makers among the least successful, yet they don't lose as much as the top winners do.

New comment by vcf in "Who wins and who loses in prediction markets? Evidence from Polymarket"

vcf — Thu, 21 May 2026 22:26:55 +0000

Thanks! No, we haven't looked at the capital "locked" in these markets (which is important considering there is no margin trading, at least not yet). Most markets have a short horizon, but some have very long ones. It gets very complicated very quickly because it's not always the case that you open a position and then close it (you get partial fills, users closing partial positions, etc.). Taking that into consideration would make liquidity providers look even better than they do in our study. Not having their capital locked allows liquidity providers to trade more and earn more per trade on average. Trading on margin would allow liquidity takers to lose more money more quickly (this is an educated guess; you never know what the outcome of a new policy would be until you implement it).

New comment by vcf in "Who wins and who loses in prediction markets? Evidence from Polymarket"

vcf — Thu, 21 May 2026 19:20:17 +0000

That's true, but you can invest in your infrastructure and data sources to be faster than most traders, which allows you to provide liquidity with a smaller spread (and snipe the slower traders that try to provide liquidity)

New comment by vcf in "Who wins and who loses in prediction markets? Evidence from Polymarket"

vcf — Thu, 21 May 2026 17:06:35 +0000

not AI slop, simply a copy paste if the abstract of the paper. journals in our field limit the allowed number of words, so the style can feel « unnatural » even when human-written

New comment by vcf in "Who wins and who loses in prediction markets? Evidence from Polymarket"

vcf — Thu, 21 May 2026 15:19:21 +0000

Yes, when you submit for publication. In our field, you rarely see one for pre-prints, unless you have one to disclose.

New comment by vcf in "Who Wins and Who Loses in Prediction Markets? Evidence from Polymarket"

vcf — Thu, 21 May 2026 15:11:56 +0000

Yes, but the alternative (that some people are very good at forecasting) is also plausible. It's also useful to have a good prediction model and timely data sources when providing liquidity. We also find that some of the "biggest losers" also provide liquidity; they just aren't as good at it.

New comment by vcf in "Who wins and who loses in prediction markets? Evidence from Polymarket"

vcf — Thu, 21 May 2026 15:01:48 +0000

Yes, power laws are everywhere. The exact shape of each distribution varies, however, and little is known empirically about the distribution of trading profits in financial markets.

New comment by vcf in "Who wins and who loses in prediction markets? Evidence from Polymarket"

vcf — Thu, 21 May 2026 14:59:46 +0000

We don't know the exact benchmark, but your insight is correct. We provide a simulation similar to what you have in mind towards the end of the paper, but you can generate almost any distribution you want by fine-tuning a simulation...

New comment by vcf in "Who wins and who loses in prediction markets? Evidence from Polymarket"

vcf — Thu, 21 May 2026 14:56:56 +0000

Because it's not required and not common practice in our field at this stage. But none of us (I'm one of the authors) is affiliated with or has a financial interest in any prediction market platform.

New comment by vcf in "Who wins and who loses in prediction markets? Evidence from Polymarket"

vcf — Thu, 21 May 2026 14:53:47 +0000

Not meant to sound like AI, but most academic journals limit abstracts to 100 words, so they rarely feel natural...

I agree: insiders are hard to study because they are finite and short-lived. We're pretty confident there are insiders out there trading on Polymarket; however, our conclusion is that they don't account for a significant fraction of the total trading gains on the platform.

New comment by vcf in "Who Wins and Who Loses in Prediction Markets? Evidence from Polymarket"

vcf — Thu, 21 May 2026 14:50:18 +0000

We have a grad student working on matching markets across venues. Not a trivial task at scale, but we hope to look at that eventually.

New comment by vcf in "Who wins and who loses in prediction markets? Evidence from Polymarket"

vcf — Thu, 21 May 2026 12:55:16 +0000

We study trading gains and losses on Polymarket, the largest prediction market. Using 588 million trades ($67 billion in volume), we show that the gains are highly concentrated: the top 1% of users capture 76.5% of profits. Successful traders provide liquidity using limit orders that resolve favorably relative to realized outcomes while unsuccessful traders take liquidity using market orders. Monthly performance is weakly persistent, however, this may represent sample selection rather than skill. A detailed analysis of the trading behavior of the most successful accounts suggests that "insider'' trading is unlikely to explain the performance of the largest winners.

Full dataset available at https://huggingface.co/datasets/vgregoire/polymarket-users

Who wins and who loses in prediction markets? Evidence from Polymarket

vcf — Thu, 21 May 2026 12:55:16 +0000

Article URL: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=6443103

Comments URL: https://news.ycombinator.com/item?id=48221877

Points: 169

# Comments: 154

New comment by vcf in "Looking at the data behind prediction markets"

vcf — Fri, 08 May 2026 22:27:58 +0000

Interesting read. Regarding the relationship between volume and accuracy, there need not be one in limit-order-book markets like Kalshi and Polymarkets. In theory, as long as quotes are accurate and adjust quickly to new information, there is no need (and no incentive) to trade since prices are efficient. This is the case in US equity markets: most price discovery occurs through quote updates, not through trades.

Studying prediction markets is one of my current research areas. In my latest paper (preprint at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=6443103), we find that on Polymarkets, markets are, on average, quite accurate and unbiased. We did see a similar non-pattern between trade volume and accuracy, past a certain threshold.

New comment by vcf in "Show HN: Faceoff – A terminal UI for following NHL games"

vcf — Tue, 21 Apr 2026 11:20:16 +0000

Thanks! I will look into these bugs, it’s a PIA because you can only debug those while there is a live game… Same with auto-refresh, it should work but for some reason it’s inconsistent.

New comment by vcf in "Show HN: Faceoff – A terminal UI for following NHL games"

vcf — Sun, 19 Apr 2026 23:52:04 +0000

I took the lazy way out and use a dependency for that. I’ll look into it and see if I can either push a fix upstream or reimplement myself.

New comment by vcf in "Show HN: Faceoff – A terminal UI for following NHL games"

vcf — Sun, 19 Apr 2026 23:01:17 +0000

One repo per project. It makes it easier when I want to share or make public. I have 100+ repos in my account and I don’t find that cumbersome.

New comment by vcf in "Show HN: Faceoff – A terminal UI for following NHL games"

vcf — Sun, 19 Apr 2026 22:47:21 +0000

Thanks, fixed!

New comment by vcf in "Show HN: Faceoff – A terminal UI for following NHL games"

vcf — Sun, 19 Apr 2026 22:44:28 +0000

Not player stats, only team stats. I'll have to see if player-level stats are available in the API.