Re:Beating the bookies with their own numbers
by TZubiri on Sunday November 17, 2024 @08:44PM
(#42169008)
I'd say it's a type of arbitrage.
The typical arbitrage in bookies (scalping I think they call it), hedges one bet against the other.
But in the case of the paper, as I understand it, they just take the bet unhedged for some reason. Which unlike most other forms of arbitrage is sustainable.
If you were buying commodities you would also need to sell the commodities, but since these pseudo-securities coalesce into money, they don't need to make the inverse trade to sustain their alpha-seeking fund.
With that difference aside, I'd say it shares many of the same properties of arbitraging, I don't know how translateable it would be to stocks, but many of those assets coalesce into cash as well, especially fixed income (at a much slower rate), and options (albeit in more complex manners).
I imagine that with the amount of new currencies that exist, a big part of the job is going to be moving currency of one form into another and essentially forming a new circuit, for example buying crypto with fiat to bet in a crypto sportsbook, and the selling that crypto to buy more fiat.
In essence there's also the risk of becoming a money launderer doing this, whether trading stocks, currencies or betting, it's a form of arbitrage and you are getting money from ???.
The typical arbitrage in bookies (scalping I think they call it), hedges one bet against the other.
But in the case of the paper, as I understand it, they just take the bet unhedged for some reason. Which unlike most other forms of arbitrage is sustainable.
If you were buying commodities you would also need to sell the commodities, but since these pseudo-securities coalesce into money, they don't need to make the inverse trade to sustain their alpha-seeking fund.
With that difference aside, I'd say it shares many of the same properties of arbitraging, I don't know how translateable it would be to stocks, but many of those assets coalesce into cash as well, especially fixed income (at a much slower rate), and options (albeit in more complex manners).
I imagine that with the amount of new currencies that exist, a big part of the job is going to be moving currency of one form into another and essentially forming a new circuit, for example buying crypto with fiat to bet in a crypto sportsbook, and the selling that crypto to buy more fiat.
In essence there's also the risk of becoming a money launderer doing this, whether trading stocks, currencies or betting, it's a form of arbitrage and you are getting money from ???.