I don’t remember anyone proposing “maybe this trader has an edge”, even though incentivising such people to trade is the mechanism by which prediction markets work. Certainly I didn’t, and in retrospect it feels like a failure not to have had ‘the multi-million dollar trader might be smart money’ as a hypothesis at all.
Why do you focus on this particular guy? Tens of thousands of traders were cumulatively betting billions of dollars in this market. All of these traders faced the same incentives.
Note that it is not enough to assume that willingness to bet more money makes a trader worth paying more attention to. You need the stronger assumption that willingness to bet n times more than each of n traders makes the single trader worth paying more attention to than all the other traders combined. I haven’t thought much about this, but the assumption seems false to me.
Because I saw a few posts discussing his trades, vs none for anyone else’s, which in turn is presumably because he moved the market by ten percentage points or so. I’m not arguing that this “should” make him so salient, but given that he was salient I stand by my sense of failure.
Mmh, if there is no reason to take that particular trader seriously, but just the mere fact that his trades were salient, I don’t see why one should experience any sense of failure whatsoever for not having paid more attention to him at the time.
Still, my main point was about the reasons for taking that particular trader seriously, not the sense of failure for not having done so, and it seems like there is no substantive disagreement there.
I don’t remember anyone proposing “maybe this trader has an edge”, even though incentivising such people to trade is the mechanism by which prediction markets work. Certainly I didn’t, and in retrospect it feels like a failure not to have had ‘the multi-million dollar trader might be smart money’ as a hypothesis at all.
Why do you focus on this particular guy? Tens of thousands of traders were cumulatively betting billions of dollars in this market. All of these traders faced the same incentives.
Note that it is not enough to assume that willingness to bet more money makes a trader worth paying more attention to. You need the stronger assumption that willingness to bet n times more than each of n traders makes the single trader worth paying more attention to than all the other traders combined. I haven’t thought much about this, but the assumption seems false to me.
Because I saw a few posts discussing his trades, vs none for anyone else’s, which in turn is presumably because he moved the market by ten percentage points or so. I’m not arguing that this “should” make him so salient, but given that he was salient I stand by my sense of failure.
Mmh, if there is no reason to take that particular trader seriously, but just the mere fact that his trades were salient, I don’t see why one should experience any sense of failure whatsoever for not having paid more attention to him at the time.
Still, my main point was about the reasons for taking that particular trader seriously, not the sense of failure for not having done so, and it seems like there is no substantive disagreement there.