Episode summary
These Are the Sharps Actually Making Money on Prediction Markets | Odd Lots
Odd Lots
· · 48 min · Hosts: Joe Weisenthal, Tracy Alloway · Guests: Brian Golden, Daniel Reichman, Adam Iscoe
Summary
Prediction markets can be brutally zero-sum, but the episode argues that a small set of traders still makes real money by doing unusual amounts of work. The discussion centers on a private Discord of serious traders who pool information, build models, and specialize in areas like elections and inflation, while most retail participants remain the “dumb money.” The guest reporter says he found these traders only after losing money himself and then tracing who was consistently on the right side of trades.
The sharpest edge, the traders argue, comes from bottoms-up research rather than hot takes: reconstructing government formulas, calling experts, tracking local political dynamics, and building event-specific models. They say prediction markets are especially useful where prices are distorted by emotion, media silos, and low liquidity, even if they are not always more efficient than polls or traditional forecasts.
The episode also spends time on the dark side of the space: insider trading, market manipulation, bad platform design, and whether prediction markets are really answering important questions or just creating new ways to gamble. The traders are skeptical of easy money claims, and they expect the market to get harder as more professionals and informed participants arrive.
Key takeaways
- The traders say their edge comes from intensive research, not luck, with one describing inflation work built by reconstructing the BLS formula in Excel.
- The panel argues elections remain especially mispriced because voters and traders live in siloed information environments and react to narratives, not just data.
- One guest says prediction markets are most useful when they force people to “bet your beliefs” and pay a price for being wrong.
- The traders think comment sections are usually a bad signal and say sharp money tends to stay quiet rather than argue publicly.
- They expect prediction markets to get harder as liquidity improves and more professional money enters, just as poker and daily fantasy did.
Notable quotes
“it is sort of like that. I I would describe it almost as an Avengers model where there are different people in the group that have different specialties”
“I rebuilt their formula on Excel. It took me like 3 months to figure out exactly how they math the formula”
“I think if they were all efficiently priced you wouldn't be able to get some of the returns that some people in this group have gotten”
“I don't really believe that. I've just seen too many markets that are way way off”
“Always bet against the comment section”
How the episode opens
Bloomberg Audio Studios podcasts, radio, news. — Hello and welcome to another episode of the OddLots podcast. I'm Joe Wisenthal — And I'm Tracy Aloway. — Tracy, can I uh reveal a very um rumor take of mine, so to speak? Go on.
I actually really loathe anything that's sort of like identified as like get-rich quick or the gamification of stock trading or gamification of stock trading. Um — Gamification would be something different.
That would probably be something different. I don't know why I pronounced it that way. Gamification of stock trading.
Gambling uh ads. I really don't like gambling ads that imply that you're going to be a winner. And I really don't like the even though I'm very interested in prediction markets.
I generally don't like, you know, a lot of the marketing. There was a really good Wall Street Journal article um about poly market and these ads that they had created. This idea that everyone's a winner and there's all this free money out there.
You just have to trade your knowledge of whatever rainfall or whatever. Like I really like it really viscerally bothers me.
Yeah. I think this is the key difference with prediction markets is it's zero sum. Yeah. Right. If you make a bet, someone is on the other side taking the opposite of that bet. And that feels a little different to me than like traditional stock markets where, you know, you would get some cash flow, some dividend,
Sell, monetize, whatever you got and someone else buys like — No, I totally agree. I mean, look, there are certainly zero sum there are all kinds of zero sum markets in what we'd call trades are zero sum, options are zero sum, etc. But on the other hand, like but yes, zero sum games, even if we're talking about like options or futures or swaps or whatever, that's not investing.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- prediction markets
- trader performance
- systematic biases
- insider trading
- politics and economics
Watch the episode
Watch “These Are the Sharps Actually Making Money on Prediction Markets | Odd Lots” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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Odd Lots, this episode and its artwork belong to Bloomberg. Octagon is not affiliated with the show; this page is an independent summary.
