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How NOT to Trade Stock Options

TLDR

CHAPTER

The Dynamics of Prediction Markets

This chapter explores prediction markets and their ability to forecast real-world events like elections. It discusses the mechanics of betting on outcomes, comparing it to stock trading, while also examining recent examples of arbitrage opportunities within these markets. The chapter highlights the accuracy of betting odds in predicting electoral results and the intriguing story of an enormous financial loss incurred by an individual.

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