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.