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barcharyesterday at 10:52 PM1 replyview on HN

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.


Replies

hunterpaynetoday at 3:11 AM

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