alt Hacker NewsThe oil trade structure actually does make sense, because this is how you buy oil, or really any commodity that takes so much space and weight. You order it ahead of time, then if you hold till the contract settles you are allowed to pick it up from the place and in the way designated in the contract specification. In fact you are obliged to pick it up, that's why prices can go negative in exceptional situations. Prediction markets are then just a clean cash-only derivative.
Most of the other prediction markets seems rather stupid to me (they are completely detached from any real world activity), other than their prices being a fairly reliable source of information for bystanders.
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are you saying that the people trading on inside information about military operations are… producers hedging exposure?
>The oil trade structure actually does make sense, because this is how you buy oil, or really any commodity that takes so much space and weight. You order it ahead of time, then if you hold till the contract settles you are allowed to pick it up from the place and in the way designated in the contract specification. In fact you are obliged to pick it up, that's why prices can go negative in exceptional situations. Prediction markets are then just a clean cash-only derivative.
You just described what is happening, you didn't actually provide any reason for why this is good for anyone but the individuals profiting from it.