JanPro's Shortform
post by JanPro · 2024-06-28T18:21:53.992Z · LW · GW · 5 commentsContents
5 comments
5 comments
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comment by JanPro · 2024-06-28T18:21:54.093Z · LW(p) · GW(p)
Prediction markets but the underlying currency is not $ but an index fund (e.g. S&P500).
People don't want to lock up their money when the world is growing and the currency is inflating.
Replies from: adrian-kelly-1, leogao, kave, Dagon↑ comment by Adrian Kelly (adrian-kelly-1) · 2024-06-30T09:34:48.799Z · LW(p) · GW(p)
IBKR just announced a new prediction market, and it pays interest on the value of your positions (fed funds rate minus 0.5%)
↑ comment by Dagon · 2024-06-28T20:44:36.001Z · LW(p) · GW(p)
Hmm, I wonder how long the term and how thin the spread must be for this to be financially equivalent to just betting the S&P500. I think it's a promising idea to take away the first-level objection, but I'd love to hear from actual financial analysts or traders about when it's enough to get them to invest/bet.
The fundamental problem of long-dated transactions having either large counterparty risk or locked-up assets (which ALWAYS have some sort of option/liquidity value that's given up) isn't solvable, but this may make it somewhat better.