I made pretty good returns (e.g. 40% annualized) during the 2020 election on predictit.
I even found a pure arbitrage opportunity.
But you can't really scale up to make it worthwhile on PredictIt due to bet size limitations.
I even found a pure arbitrage opportunity.
But you can't really scale up to make it worthwhile on PredictIt due to bet size limitations.
The majority of traders seemingly looked at the headline and failed to understand the contract terms, which only required a "quarterly annualized" GDP growth of 5%, during at least one quarter of 2020. So a severe economic downturn in Q2, followed by even a modest recovery in Q3, would have made a "yes" outcome all but guaranteed.
The comments became pretty hilarious once someone pointed this out.
Nice way to blame the masses. Seems to me more like the terms contradicted the headline, thus making this a mechanism for exploiting people who assume they're making an honest bet. Seems like fraud, honestly.
The annual rate of increase in real gross domestic product (GDP) in one or more quarters prior to or including the fourth quarter of 2020, as rounded to the nearest tenth of a percent, per the advance, second or third estimate, as published subsequent to the launch of this market for any such quarter by the Bureau of Economic Analysis (BEA), shall be 5.0% or higher.
Any sane person will tell you "Will the US economy hit 5.0%+ GDP growth by year-end 2020?" means GDP at the end of 2020 will be at least 5% higher than it was at beginning of 2020 (unless there's an explicit starting point mentioned). Aside from the question of the data source, it's pretty crystal clear what it means, and that it lacks any notion of quarters or annualization. And it's very obviously different from "Will the US economy hit 5.0%+ annualized GDP growth in any quarter in 2020?", which is what the fine print is measuring.
"It" as in their intended title? It obviously didn't match what they wrote, hence the "clarification". Not particularly different from how politicians frequently "clarify" that by X they actually mean not-X...
Riddle me this: imagine your convince your spouse to pour all your joint savings into a $1M home because its value will hit 5%+ growth by the year's end. And then at the end of the year it turns out your home is now worth $500k, after briefly dipping down to $400k in Q3. On a scale of 1 to 10, exactly how amused do you think your spouse would be to find out you actually meant "annualized quarterly growth rounded to the nearest tenth of a percent"?