There are opportunities for pairs trading in PredictIt markets due to inefficient pricing of shares. It is possible to by an equal number of inversely correlated shares and net a profit regardless of who wins.
Trump Yes: $0.50
Biden Yes: $0.44
Trump wins:
Gain = $1.00 - $0.50 = $0.50
Fee = $0.50 * 10% = $0.05
$0.50(gain) - $0.05(fee) - $0.44(Biden loss) = $0.01
Biden wins:
Gain = $1.00 - $0.44 = $0.56
Fee = $.056 * 10% = $0.056
$0.56(gain) - $0.056(fee) - $0.50(Trump loss) = $0.004
- predictit_hedge_2020_presidential.py, looks for hedge opportunities in Trump and Biden-related contracts.
- predictit_hedge.py, looks for hedge opportunities in user-inputted contracts.
- predictit_api_write_market_data.py, writes to CSV the current market and contract prices in PredictIt.
- predictit_dual_contracts.py, in markets with only 2 contracts looks for discrepancies in Yes/No prices.
- predictit_538_senate.py, compares PredictIt share prices with most recent 538 poll in US Senate races.
- While the code accounts for the 10% fee on gains from trades, it does not factor in the 5% withdrawal fee.
- In predictit_hedge_2020_presidential.py, similar markets are treated as equals, e.g. 'Democratic candidate winning presidency' = 'Biden winning presidency.'
- In predictit_hedge_2020_presidential.py, contracts are hard coded to Yes & No prices of 2 contracts for Trump winning and 5 contracts for Biden winning.