Whereas many are solely listening to about prediction markets for the primary time, for close to a decade, nameless dealer Domer (@Domahhhh) has been on the frontier of making the most of outcomes of unknown future occasions.

Political and financial issues are Domer’s specialty, though he doesn’t shrink back from the reasonably summary occasions both—for instance; buying and selling on the end result of Britney Spear’s conservatorship and the Suez Canal obstruction!

Now at a degree the place he’s netting PnL of a number of hundred thousand {dollars} a yr (throughout a number of exchanges), a lot of Domer’s winnings are resulting from his potential to garner an data edge and rejection of the Environment friendly Market Speculation.

Matters & Timestamps:

Please word: Actual instances will fluctuate relying on present adverts.

• 03:50 – Leaving full-time employment: enjoying poker, buying and selling shares.
• 10:35 – Mechanics of prediction markets: timing/pricing of contracts, exchanges.
• 23:25 – Development of prediction markets: capability for bigger dimension.
• 28:45 – Analysis course of: filtering occasions, buying data.
• 39:10 – Buying and selling: market value vs. true value, guess sizing, commerce construction.

Hyperlinks & Sources:

Further Feedback – Domer:

Let me simply provide one piece extra of readability on the shares, to not paint too rosey of an image…

On shares, I keep in mind particularly additionally doing a YHOO/BABA commerce the place the BABA shares that YHOO owned was value greater than the market cap of YHOO – their money or one thing like that lol. That was the primary large run-up, after which into SAFM the hen firm. I most likely did a number of extra each damaging and optimistic that I’m not remembering, however the large damaging one I did was a leveraged oil firm (very delicate to grease costs) that originally doubled as a result of it was method too shorted, after which oil tanked and the inventory collapsed and the shorts received the final snigger. To be exact, I ran $35k to about $225k at its peak, after which about $150k after about 18 months, at which level I used to be already transitioning again to betting and type of left shares behind. These are tough approximations.

The opposite large damaging cause I transitioned out of shares was the tax remedy. As a person dealer within the US buying and selling your individual portfolio on a short-term foundation, it’s actually type of shit and you need to soar by way of loads of foolish hoops with a purpose to qualify for higher tax remedy. I needed to suppose so much about timing my sells with the calendar tax yr, and I noticed that I might have wild swings in earnings and wild swings in tax brackets. As an illustration, I paid loads of taxes in 2013 as a result of my short-term inventory beneficial properties had been massive, after which after I made that damaging play and realized the losses in 2014, I couldn’t return in time and pay much less in 2013! And carrying ahead the losses is cumbersome. So tl;dr the tax remedy of beneficial properties/losses was one other major cause to move again into the comfy bosom of prediction markets. I nonetheless do commerce shares every now and then, however principally as an extension of what I do. As an illustration, I made a good chunk shopping for S&P places as I noticed the preliminary COVID surge in China. That’s an excellent instance of a low-risk, high-reward guess the place I ought to’ve been betting far more! And one of many impetuses to be rather less cautious.

One last thought that I didn’t get an opportunity to say is that it’s attention-grabbing to me that there’s just about a prediction market within the inventory market proper now with this TWTR/Elon deal. I notice buying and selling mergers/acquisitions is a complete subfield, however this one specifically has captured the general public’s consideration and the inventory/choices have been shifting wildly in response to Elon tweets. Which could be very analogous to how a prediction market capabilities! You possibly can think about somebody speaking to their good friend like: “I used to be pondering there was a 70% probability this deal will get finished, however after that Elon poop emoji tweet to Parag, now I’m pondering we’re right down to solely 50% probability it will get finished. What do you suppose, did that poop emoji change your pondering in any respect?”