What are good election betting opportunities?

post by Scott Garrabrant · 2020-10-29T07:19:10.409Z · LW · GW · No comments

This is a question post.


    Scott Garrabrant
    Rafael Harth
No comments

I have seen a bunch of people saying that there are very good opportunities to bet on the upcoming election. This is meant to be a practical advice thread to share concrete opportunities.


answer by Scott Garrabrant · 2020-10-29T07:45:09.508Z · LW(p) · GW(p)

You can turn 10 dollars into ~100 dollars on predictit right now, with no risk, and you immediately get the money to make other bets on predictit (although it takes 30 days to turn it back into cash, and the process takes a while). Here are the steps:

  1. Go here, and add up all the numbers in the rightmost column under "Best Offer" for "Buy No"
  2. Confirm that the sum is at most 14.89. It is 14.80 at the time I am writing this. If it is more than 14.89, you can't make (much) money here. The amount you make is roughly 8 dollars per cent of difference with 14.90.
  3. Make an account on predictit, and deposit the minimum amount of 10 dollars. (You can skip this if you already have a predictit account)
  4. Buy 10 shares of No for each of the 16 buckets in the above market.
  5. Confirm that your cash is now strictly greater than 10 dollars.
  6. Repeat step 4 until you have bought 858 shares of each bucket. As you have more cash, you can increase the number of shares you can buy at a time.
  7. On the top right of this market, there will be an underlined number under "Max. Payout." Click on that number to see a pop-up with a chart showing (in the rightmost column) how much extra money you will get in each world. If any of those numbers is greater than a dollar, repeatedly buy another No share of that world, until all the numbers are less than a dollar.
  8. Do the same for this market. (This one is at 14.88 at the time I am writing this)
  9. You now have ~100 dollars of predictit money. You can take it out for a 5% fee, and a 30 day delay, or you can bet in other predictit markets.
comment by platers · 2020-10-29T14:58:19.744Z · LW(p) · GW(p)

Could you elaborate on step 4? How can you buy 10 shares of each bucket if you only have $10? Isn't the total cost 14.80 * 10?

comment by Scott Garrabrant · 2020-10-29T16:21:40.376Z · LW(p) · GW(p)

Predictit promises that only one will be yes and immediately gives you back the liquid money when you arbitrage.

comment by Edward Kmett (edward-kmett) · 2020-11-03T19:54:04.502Z · LW(p) · GW(p)

I was able to complete the transactions on the "What will be the Electoral College margin in the 2020 presidential election?" side, but not on the election itself side.

comment by Dach · 2020-11-03T01:37:16.616Z · LW(p) · GW(p)

I can confirm that this still works. Sum of the price of all Nos is $14.77, payoff is $15.

comment by lunis · 2020-10-30T15:18:31.465Z · LW(p) · GW(p)

Is this essentially just giving you leverage in PredictIt?

This process increased my "cash" on PredictIt by $117, but it looks like it will probably pay out around 15/14.75*850 - 850 = $15. If I lost my $117 on some other bet, would my PredictIt balance eventually end up negative?

comment by Scott Garrabrant · 2020-10-30T18:38:37.950Z · LW(p) · GW(p)

No, you can't go negative. The "cash" is actually cash (modulo a delay and a 5% withdraw fee). If you withdraw or lose, you won't be able to sell you shares from this market, but there is no risk of debt.

comment by T3t · 2020-10-30T06:16:52.775Z · LW(p) · GW(p)

Also confirming.  When I started the sum was $14.78.  I started with $10 and ended with ~$101.  It took about 35 minutes of mostly-but-not-entirely-focused clicking.

comment by knite · 2020-10-30T05:41:38.560Z · LW(p) · GW(p)

I can confirm that this arbitrage opportunity exists and works as described. At the time of this writing, the sum of all Nos for the EC market is $14.70, and running the loop up to 850 shares turned $1000 into $1078. Depending on which contract actually resolves Yes, there's an additional payout of a few bucks.

The way PredictIt calculates risk and payouts for multi-contract markets seems very confusing and is making my head hurt a bit. My Max Payout for the market is $850, but I have no idea how this number was calculated, and it doesn't make any sense - my understanding is that the real max payout is the largest potential payout across the market's contracts, which is a much smaller $13.

If anyone can explain how these multi-contract markets actually work, I'm all ears!

comment by Scott Garrabrant · 2020-10-30T07:35:12.070Z · LW(p) · GW(p)

I think Predictit pays on arbitrage according to the assumption that at most one bucket resolves to yes, but not according to the assumption exactly one bucket resolves yes, so that 850 is in the hypothetical world where none of the 16 buckets resolve to yes.

comment by goose000 · 2020-11-11T16:37:11.873Z · LW(p) · GW(p)

As someone new to Predictit, I can't help but feeling I'm misunderstanding how predictit pays out. Now that I have completed this, and have ~859 shares of each "No", will I not get payed $1 for each share of "No" which turns out to in fact be "No"? Based on what everyone is saying here, this seems highly unlikely, but I can't figure out how it works otherwise.

comment by goose000 · 2020-11-11T21:50:55.099Z · LW(p) · GW(p)

Nevermind, I think I've mostly figured it out: by arbitraging, I'm effectively borrowing against my various positions, so once the question is resolved, those debts must be paid before I can get the difference.
Another question: what is the more general rule in trying to figure out when this can be done? By my math, 14.88 is about 93% of the 16 options, or 99% of 15 options. This leads me to believe that the more general rule is .99*(n-1) where n is the number of options, which would make sense, since you will not get paid for one of your positions. Is this roughly correct?

comment by River (frank-bellamy) · 2020-10-29T15:15:46.840Z · LW(p) · GW(p)

Why do you say to only deposit $10? Is that just the minimum to play, or is there no benefit to more?

comment by Scott Garrabrant · 2020-10-29T16:20:19.848Z · LW(p) · GW(p)

There are caps on predictit. You can’t put more than 850 dollars on any contract.

answer by Rafael Harth · 2020-10-29T09:17:39.293Z · LW(p) · GW(p)

You can use catnip to bet on Biden in the election.

Points for:

  • It's doable from around the world
  • It's easy to use compared to other crypto currency methods
  • It has low fees and a pretty good price for Biden (between 62 and 63 percent)
  • It has no betting limits

Points against:

  • It's a tiny project without any previous track record, so you might not trust it
  • Very hard to use compared to PredictIt (you have to set up a crypto currency wallet and use a platform like bitvavo to buy Etherium)
  • Anything that requires you to do that is probably inefficient for betting small amounts (afaik the crypto currency stuff has constant-sized fees)

If it can be trusted, it is in theory a way to make (a) more money than on PredictIt, and (b) with lower fees. (PredictIt charges 10% on profits and 5% on withdrawals. It also has an 850$ cap per market, although there are at least seven de-facto Biden-wins-the-election markets.)

comment by Mark Xu (mark-xu) · 2020-10-29T19:04:33.240Z · LW(p) · GW(p)

https://docs.google.com/document/d/1coju1JGwKlnejxkNiqWNJRlknebT_HUA1iz3U_WvZDg/edit is a doc I wrote explaining how to do this in a way that is slightly less risky than betting on catnip directly.

answer by deluks917 · 2020-11-02T23:44:40.666Z · LW(p) · GW(p)

If you live outside of the USA there are places you can still place a ton of money on pop-vote at good odds (~1.15). Biden is probably over 99% to win the popular vote. You can bet on Biden and place a larger bet on pop-vote to 'hedge'. I know some people with over 100K on pop-vote. 

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