“adverse selection in prediction markets makes gap risk worse than any other asset class”
Applies adverse selection concepts specifically to prediction markets. Compares market making difficulty across Indian options (easy), crypto (medium), and prediction markets (legendary). Argues gap risk is effectively worse than any other asset class because informed counterparties can have near-perfect information and take out entire order books.
Extensive technical background assumed
Platforms mentioned: Polymarket, Kalshi, Limitless Exchange