71 cents*, the bookie gets a cut either way it goes.

This is the truth of the matter, ultimately nobody wins except the bookie, who profits either way.

eru 2 days ago | parent | next [-]

Hedging can itself be a useful service, even if the customer doesn't make money on average. Have you heard of insurance?

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benmanns 2 days ago | parent | prev [-]

On Polymarket you can be the bookie and put up a yes at $0.72 and no at $0.74 if you’re confident in that 73% estimate.

	▲	thaumasiotes a day ago \| parent [-]
		In fact, Polymarket will subsidize you to do this: https://docs.polymarket.com/market-makers/overview https://docs.polymarket.com/market-makers/maker-rebates

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zahlman 2 days ago | parent | prev | next [-]

Even if a cut isn't taken and there aren't other inefficiencies, any money tied up in long-term predictions is earning 0% instead of whatever the current risk-free rate of return is.

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xrisk 2 days ago | parent | next [-]

Assuming that the prediction market is perfectly priced right? How accurate is that assumption, or are you counting that as an “inefficiency”?

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eru 2 days ago | parent | prev | next [-]

Earning less than the risk free rate is a 'cut being taken'.

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bradleyjg 2 days ago | parent | prev [-]

IBKR relentlessly advertises on the radio, so I’m aware that on their scheme you earn an interest like incentive coupon for every day you hold open the position.

	▲	anonym29 2 days ago \| parent [-]
		Happy IBKR customer here. ForecastTrader has absolutely horrific liquidity outside of maybe 30-40 large contracts. The rest is all market makers that only offer 10-100 or so shares at each price point before bumping up a penny or two. No knock on IBKR as a whole, but you can't even effectively buy on most events or outcomes without slippage eating away your entire edge, and forget about real serious positions above a few grand entirely outside of those 30-40 big contracts.

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mr_00ff00 2 days ago | parent | prev | next [-]

Untrue for polymarket. True for kalshi. No bookie fees on polymarket

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pinkmuffinere 2 days ago | parent [-]

Wow that's news to me. How does polymarket make money if not from fees?

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SirSourdough 2 days ago | parent | next [-]

It doesn't seem like it's strictly true that they don't charge trading fees.

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.

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CrazyStat 2 days ago | parent | prev | next [-]

Polymarket charges “taker” fees (people removing liquidity by matching listed orders) on most markets. Geopolitics markets are exempt. A portion of the collected fees then get redistributed to “makers” (people who provide liquidity by listing orders for others to match). Presumably the rest of these fees make up polymarket’s revenue.

	▲	OJFord 2 days ago \| parent [-]
		Which is essentially also providing a platform for making the book for the other platform, on which 'bookie fees' are charged, but Polymarket itself only keeps a certain cut of it, for facilitating but not actually book-making.

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nl 2 days ago | parent | prev | next [-]

They emit new (crypto) tokens which they can sell

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richarlidad 2 days ago | parent | prev [-]

trying to become bloomberg by selling to institutions

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dlgeek 2 days ago | parent | prev [-]

Wouldn't it be 75 cents then? (The cut would come out of higher pricing, since the payout is always a dollar).

	▲	eru 2 days ago \| parent [-]
		Well, 75 cents for you buying the bet, 71 cent for you selling the bet. Or something like that.