To elaborate on the observed market inefficiency:
I'm noticing a potential arbitrage opportunity due to the difference in pricing between "yes" votes for Trump and Harris on this betting site. Selling "yes" for Trump while buying "yes" for Harris could resemble a "long synthetic future" in options trading, where the position might simulate a bet on one candidate over the other without directly purchasing a "no" position. In theory, this setup would generate a credit, similar to selling a put in options, where you receive funds upfront.
In this scenario, the max risk would be an essential factor, though the platform may not explicitly outline it. Typically, collateral is required to cover any potential losses, which may align with my assumption that such trades need backing. However, unlike options where collateral is held by the brokerage, platforms like this might use blockchain-based contracts, which could require gas fees (transaction fees) depending on the platform's infrastructure. I want to confirm if these transactions require gas or other fees, as they can impact the overall profitability of my strategy. This approach would allow me to benefit from price movements from this inefficiency between bets and polling data, but it may also carry a theoretically unlimited risk.
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