Cross-Market Gaps
Why two venues price the same event differently, and what a gap between them is really worth.
Cross-Market Gaps · 3 min readWhy Two Venues Price the Same Event DifferentlyA price gap between two prediction markets is usually not an error. Here are the structural reasons the same event trades at different numbers in different places.
Cross-Market Gaps · 3 min readWhat a Cross-Market Gap Is Actually WorthTake a six-cent gap between two venues and subtract every real cost, one line at a time. The remainder is the honest number, and it is much smaller.
Cross-Market Gaps · 3 min readHow Equivalence Grades Work, and Why They Matter MostBefore comparing two prices you have to decide whether the two questions are the same. That judgement is graded, and the grade matters more than the gap.
Cross-Market Gaps · 3 min readResolution Differences That Break a ComparisonThe specific ways two markets on the same subject can resolve differently: sources, vintages, deadlines, ties and the fallback when data never arrives.
Cross-Market Gaps · 3 min readPersistent Gaps, Temporary Gaps, and Telling Them ApartSome price differences close in minutes and some never close at all. The two kinds have different causes and require completely different responses.
Cross-Market Gaps · 3 min readTen Ways Cross-Market Analysis Goes WrongThe recurring errors in comparing prediction market prices across venues, from stale quotes to mismatched thresholds, and how to catch each one.
Cross-Market Gaps · 3 min readStale Quotes and Why Timing Ruins ComparisonsThe largest source of phantom cross-market opportunity is not disagreement. It is one price being older than the other. How to measure and exclude it.
Cross-Market Gaps · 3 min readMatching Markets Across Venues Without GuessingBefore you can compare two prices you must establish that the two contracts are about the same thing. Structural matching, and why title similarity fails.
Cross-Market Gaps · 3 min readHow to Read a Cross-Market Gap TableA gap table sorted by size is a list of artefacts. Here is the order to read one in, what each column means, and which rows to ignore first.
Cross-Market Gaps · 3 min readWhy the Biggest Gaps Are Always the Least LiquidPlot price difference against traded size and the shape is always the same. Understanding why explains most of what a cross-market table is showing you.