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Comment by pc86 | Hacker News Reader

I've heard people say this but it really only makes sense if you don't think about it for more than 10 or 20 seconds.

Prediction markets by definition always resolve to one side being completely wiped out and losing everything. Stocks going to zero happens pretty seldomly, in prediction markets it's guaranteed to happen every single time.

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Prediction markets are not binary options. They are closer to a liquid equity option market (and most equity option markets aren't liquid at all). That means you can trade into and out of positions at any time and for different prices depending on where the market is. You can even do time spreads where you can't lose it all no matter what happens. Maybe your 10 or 20 seconds of thinking wasn't as perfect as you think since you don't seem to understand how prediction markets actually work.

That's only true if you leave your money in...which you don't have to do.

You can play prediction markets by betting on a swing. E.g. I made a few hundred dollars betting on Harris in 2024 when Trump was at ~65% odds and then selling before the election when it was closer to 50%.

> can play prediction markets by betting on a swing

The outcomes are still capped. In that respect, it's more like a derivative market than the stock market. You can trade in and out of options. But the value in the system is tightly defined and, after fees, a net negative-sum game.

There are no fees on Polymarket. Not sure about others.

Depends on the event:

https://docs.polymarket.com/trading/fees

> There are no fees on Polymarket

"Currently, small fees apply to Crypto and Sports markets.

Starting March 30, 2026, this will expand to include other categories like Finance, Politics, Economics, Culture, Weather, and Tech" [1].

More critically, Polymarket doesn't pay interest on deposits. (Kalshi does.)

[1] https://help.polymarket.com/en/articles/13364478-trading-fee...

Thanks for the correction! I have to admit it was a while since I last looked into this and I shouldn't have been so confident.

There is a fee implicit in the market spread. It's formed out of the time value of money w.r.t. the cost of NOT trading as well as the adverse selection faced by those with standing offers.

Increased insider trading will increase spreads.

Then explain why the average prediction market has a smaller spread than the average equity option market.

In that case you limit your upside as well as an insider, and have to deal with liquidity and slippage coming and going.

So options markets then?

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