“hedging with event contracts leaves corporate treasuries exposed to basis risk”
Distinguishes between two meanings of 'hedge' — trader/market-making (position offset) and corporate finance (exposure matching) — and argues that prediction markets' contract-first approach creates persistent basis risk for would-be corporate hedgers. Warns that mis-selling mismatched binaries as corporate hedges would hand ammunition to regulators and undermine the CFTC's policy case for event contracts.
Some technical background helpful
Platforms mentioned: Kalshi