> not including 5% withdrawl fee

This withdrawal fee they have is a confounding variable to interpreting the prices of the options on Predictit.

I've seen many slam dunk contracts trading at $0.96 or $0.97 a share. At first I thought it would be a good idea to buy as many as the platform would allow me, and get the guaranteed 4ish% percent return. But then I remembered the withdrawal fee and realized I'd still lose. And then realized that any other potential buyer would do the same.

I suppose if you already have money deposited there, and don't know where else to park it, then buying these contracts would be the in-universe equivalent of "parking it in treasuries." But I'd expect the pricing to become more accurate if that 5% transaction cost was eliminated.

Right, the 5% withdrawal fee only applies when you withdraw, meaning you could still make a profit continuously buying 95%+ markets.

The real reasons I think these often don’t follow what you expect is:

- Lots of people set sell orders at 90-99 since closing times are often uncertain and there are other opportunities that at least appear to be more profitable. - As you diverge from 50/50, it gets cheaper and cheaper for crazy people to buy up the other side of a bet. This is not always unprofitable too; they just have to sell it to a greater fool. This is with PredictIt’s $850 limit at least.

I should add to my comment, a lot of the markets I was looking at (months ago), were based on this election. So once I bought in, the money would be tied up for months. Even when I won, after taking into account the withdrawal fee, it would have been a loss. (EDIT: Assuming I deposited the money for that specific market, and it wasn't already on the platform facing down a future 5% fee)

If there are $0.95 markets that resolve in the near future, then yeah, I'd roll my money from one to the next. But now I'm wondering if those are more likely to be correctly-priced. (Because other "investors" are thinking the same thing, right?) So now I'm just picking up nickels in front of a steamroller.

I can't remember the exact markets when I saw all these 95 cent shares, but the odds of them failing were far below 1/20. Things like Hillary Clinton wining the Democratic nomination, or California voting for Trump. These are the same markets that, within a month of closing, were at 1Y/99N.

So any market that's going to resolve very soon, and is still at 5/95, probably represents closer to a true 1/20 odds, and now it's just regular old gambling :)

Many crypto exchanges like Poloniex and FTX had futures contracts for the election which paid $1 on expiration without any withdrawal fee. There are more places to trade now than PredictIt although they have far more esoteric elections than what’s available in crypto.

I'm aware, I'm just hesitant due to the counter party/smart contract security risk. In a few years when some of these platforms have more of a track record, I'll probably start using them. Seems like polymarket has done pretty well this cycle.