{"id":9186,"date":"2024-09-05T15:45:29","date_gmt":"2024-09-05T22:45:29","guid":{"rendered":"https:\/\/jeremywhittaker.com\/?p=9186"},"modified":"2024-09-06T09:15:52","modified_gmt":"2024-09-06T16:15:52","slug":"degenerate-gambling-on-polymarket-com-picking-up-pennies-in-front-of-a-steamroller-for-a-12-09-yield","status":"publish","type":"post","link":"https:\/\/new.jeremywhittaker.com\/index.php\/2024\/09\/05\/degenerate-gambling-on-polymarket-com-picking-up-pennies-in-front-of-a-steamroller-for-a-12-09-yield\/","title":{"rendered":"Degenerate Gambling on Polymarket.com: Picking Up Pennies in Front of a Steamroller&#8230; for a 12.09% Yield?"},"content":{"rendered":"\n<p>Recently, I placed a bet on Polymarket.com, speculating that Kamala Harris and JD Vance <strong>will not<\/strong> debate before the upcoming election. With just 60 days left, the odds looked favorable, and this trade seemed like an easy win. But as any seasoned investor knows, the real question is: <em>Is it worth picking up pennies in front of a steamroller?<\/em><\/p>\n\n\n<div style=\"text-align: center;\">\n<iframe\n\ttitle=\"polymarket-market-iframe\"\n\tdata-src=\"https:\/\/embed.polymarket.com\/market.html?market=kamala-harris-and-jd-vance-debate-before-election&#038;features=volume&#038;theme=dark&#038;creator=JeremyRWhittaker\"\n\twidth=\"400\"\n\theight=\"180\"\n\tframeBorder=\"0\"\n src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" class=\"lazyload\" data-load-mode=\"1\"><\/iframe>\n<\/div>\n\n\n<h3 class=\"wp-block-heading\">My Trade Breakdown<\/h3>\n\n\n\n\n<p>Here\u2019s how my position stands:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Outcome<\/strong>: No (Harris and Vance will not debate)<\/li>\n\n\n\n<li><strong>Quantity<\/strong>: 5,740 shares<\/li>\n\n\n\n<li><strong>Average Price<\/strong>: 98.2&cent; per share<\/li>\n\n\n\n<li><strong>Total Cost<\/strong>: &#36;5,637.09<\/li>\n\n\n\n<li><strong>Potential Payout<\/strong>: &#36;5,740<\/li>\n\n\n\n<li><strong>Potential Profit<\/strong>: &#36;102.91<\/li>\n<\/ul>\n\n\n\n<p>The potential profit might seem modest, but when you consider the short time horizon, it\u2019s important to look deeper into the numbers.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Return on Investment (ROI) and Yield<\/h3>\n\n\n\n<p>Let\u2019s calculate the return:<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li><strong>Total Payout<\/strong>: &#36;5,740<\/li>\n\n\n\n<li><strong>Total Cost<\/strong>: &#36;5,637.09<\/li>\n\n\n\n<li><strong>Profit<\/strong>: &#36;102.91<\/li>\n\n\n\n<li><strong>Return on Investment (ROI)<\/strong>:<\/li>\n<\/ol>\n\n\n\n\n<p class=\"ql-center-displayed-equation\" style=\"line-height: 37px;\"><span class=\"ql-right-eqno\"> &nbsp; <\/span><span class=\"ql-left-eqno\"> &nbsp; <\/span><img decoding=\"async\" data-src=\"https:\/\/new.jeremywhittaker.com\/wp-content\/ql-cache\/quicklatex.com-0b2704b9c31db80bf90c952ff7b4a41c_l3.png\" height=\"37\" width=\"192\" class=\"ql-img-displayed-equation lazyload\" alt=\"&#92;&#91;&#32;&#92;&#116;&#101;&#120;&#116;&#123;&#82;&#79;&#73;&#125;&#32;&#61;&#32;&#92;&#102;&#114;&#97;&#99;&#123;&#92;&#116;&#101;&#120;&#116;&#123;&#80;&#114;&#111;&#102;&#105;&#116;&#125;&#125;&#123;&#92;&#116;&#101;&#120;&#116;&#123;&#84;&#111;&#116;&#97;&#108;&#32;&#67;&#111;&#115;&#116;&#125;&#125;&#32;&#92;&#116;&#105;&#109;&#101;&#115;&#32;&#49;&#48;&#48;&#32;&#92;&#93;\" title=\"Rendered by QuickLaTeX.com\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 192px; --smush-placeholder-aspect-ratio: 192\/37;\" \/><\/p>\n\n<p class=\"ql-center-displayed-equation\" style=\"line-height: 36px;\"><span class=\"ql-right-eqno\"> &nbsp; <\/span><span class=\"ql-left-eqno\"> &nbsp; <\/span><img decoding=\"async\" data-src=\"https:\/\/new.jeremywhittaker.com\/wp-content\/ql-cache\/quicklatex.com-bb2e9b748755cac008298c865265b1c0_l3.png\" height=\"36\" width=\"236\" class=\"ql-img-displayed-equation lazyload\" alt=\"&#92;&#91;&#32;&#92;&#116;&#101;&#120;&#116;&#123;&#82;&#79;&#73;&#125;&#32;&#61;&#32;&#92;&#102;&#114;&#97;&#99;&#123;&#49;&#48;&#50;&#46;&#57;&#49;&#125;&#123;&#53;&#54;&#51;&#55;&#46;&#48;&#57;&#125;&#32;&#92;&#116;&#105;&#109;&#101;&#115;&#32;&#49;&#48;&#48;&#32;&#61;&#32;&#49;&#46;&#56;&#51;&#92;&#37;&#32;&#92;&#93;\" title=\"Rendered by QuickLaTeX.com\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 236px; --smush-placeholder-aspect-ratio: 236\/36;\" \/><\/p>\n\n\n<p>Although a <strong>1.83% return<\/strong> over 60 days might not sound like much, the <strong>annualized yield<\/strong> adds a different perspective. Using the formula for annualized returns:<\/p>\n\n\n<p class=\"ql-center-displayed-equation\" style=\"line-height: 49px;\"><span class=\"ql-right-eqno\"> &nbsp; <\/span><span class=\"ql-left-eqno\"> &nbsp; <\/span><img decoding=\"async\" data-src=\"https:\/\/new.jeremywhittaker.com\/wp-content\/ql-cache\/quicklatex.com-7d1012ced71b69b8fdeecd3ddb0b2481_l3.png\" height=\"49\" width=\"271\" class=\"ql-img-displayed-equation lazyload\" alt=\"&#92;&#91;&#32;&#92;&#116;&#101;&#120;&#116;&#123;&#65;&#110;&#110;&#117;&#97;&#108;&#32;&#89;&#105;&#101;&#108;&#100;&#125;&#32;&#61;&#32;&#92;&#108;&#101;&#102;&#116;&#40;&#49;&#32;&#43;&#32;&#92;&#102;&#114;&#97;&#99;&#123;&#49;&#46;&#56;&#51;&#125;&#123;&#49;&#48;&#48;&#125;&#92;&#114;&#105;&#103;&#104;&#116;&#41;&#94;&#123;&#92;&#102;&#114;&#97;&#99;&#123;&#51;&#54;&#53;&#125;&#123;&#54;&#48;&#125;&#125;&#32;&#45;&#32;&#49;&#32;&#92;&#93;\" title=\"Rendered by QuickLaTeX.com\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 271px; --smush-placeholder-aspect-ratio: 271\/49;\" \/><\/p>\n\n<p class=\"ql-center-displayed-equation\" style=\"line-height: 15px;\"><span class=\"ql-right-eqno\"> &nbsp; <\/span><span class=\"ql-left-eqno\"> &nbsp; <\/span><img decoding=\"async\" data-src=\"https:\/\/new.jeremywhittaker.com\/wp-content\/ql-cache\/quicklatex.com-16c789d2f3dd4ea04923566cd74b7656_l3.png\" height=\"15\" width=\"182\" class=\"ql-img-displayed-equation lazyload\" alt=\"&#92;&#91;&#32;&#92;&#116;&#101;&#120;&#116;&#123;&#65;&#110;&#110;&#117;&#97;&#108;&#32;&#89;&#105;&#101;&#108;&#100;&#125;&#32;&#92;&#97;&#112;&#112;&#114;&#111;&#120;&#32;&#49;&#50;&#46;&#48;&#57;&#92;&#37;&#32;&#92;&#93;\" title=\"Rendered by QuickLaTeX.com\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 182px; --smush-placeholder-aspect-ratio: 182\/15;\" \/><\/p>\n\n\n<p>That\u2019s a <strong>12.09% annualized yield<\/strong>, which suddenly makes this trade more appealing. But there&#8217;s more to consider.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">The Risk of the Steamroller<\/h3>\n\n\n\n<p>This trade feels safe\u2014after all, the odds of Harris and Vance debating seem extremely low. Yet, there\u2019s always the slim possibility that something unexpected happens in the political world.<\/p>\n\n\n\n<p>In the words of Nassim Nicholas Taleb:<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p>&#8220;I was convinced that I was totally incompetent in predicting market prices &#8211; but that others were generally incompetent also but did not know it, or did not know they were taking massive risks. Most traders were just &#8216;picking pennies in front of a steamroller,&#8217; exposing themselves to the high-impact rare event yet sleeping like babies, unaware of it.&#8221;<\/p>\n<\/blockquote>\n\n\n\n<p>Taleb\u2019s quote resonates with this situation perfectly. It highlights the danger of taking what looks like an easy bet, without fully appreciating the rare but devastating risks lurking in the background. In my case, that steamroller is the unexpected possibility of a debate between Harris and Vance, which could be triggered by an unforeseen political event.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Conclusion<\/h3>\n\n\n\n<p>The <strong>1.83% return<\/strong> over 60 days isn\u2019t life-changing, but with an <strong>annualized yield of 12.09%<\/strong>, this trade seems tempting. However, like Taleb warns, many traders sleep soundly while unknowingly exposing themselves to rare, high-impact risks. While I remain confident in the outcome, I can\u2019t entirely ignore the chance of an unexpected political twist that flattens this seemingly &#8220;safe&#8221; trade.<\/p>\n\n","protected":false},"excerpt":{"rendered":"<p>Recently, I placed a bet on Polymarket.com, speculating that Kamala Harris and JD Vance will not debate before the upcoming election. With just 60 days left, the odds&#8230;<\/p>\n","protected":false},"author":1,"featured_media":9224,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-9186","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.2 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Degenerate Gambling on Polymarket.com: Picking Up Pennies in Front of a Steamroller... for a 12.09% Yield? - Jeremy Whittaker<\/title>\n<meta name=\"robots\" content=\"noindex, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Degenerate Gambling on Polymarket.com: Picking Up Pennies in Front of a Steamroller... for a 12.09% Yield?\" \/>\n<meta property=\"og:description\" content=\"Recently, I placed a bet on Polymarket.com, speculating that Kamala Harris and JD Vance will not debate before the upcoming election. 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