Betting

May 9, 2017 — June 27, 2022

In the special case of all-or-nothing bets, we have a different outcome space than in trading and can model things differently. Introductory: Zvi Mowshowitz on Kelly bets. People often think about this for sports, but we could also imagine betting in the broader context of prediction markets.

Figure 1: Bookies marooned in Albion park after a storm, via Library of Queensland

1 Incoming

Bitedge explains betting exchange mechanics and bet arbitrage and offers reviews. e.g. here they test the customer support for betbtc. betonline.ag is another one I see around.

Khythe on details of Market making:

Making markets doesn’t only work on binary propositions, it also works on quantities. For quantities you quote a market as well as a conversion factor for the contract’s pay-out, for example “I’m 8 at 30 for the number of people who show up to my talk, $2 per person”. That would mean I’m willing to buy a contract that pays out $2 for everyone who comes to my talk for $16 (8 people times 2 dollars/person) and sell such a contract for $60 (30 times 2). If I sold such a contract, and then 34 people came to my talk, I’d need to pay out $8 on net.