Bitcoin Forum

Have you ever wondered what it would be like if Polymarket and Kalshi offered a leverage option to amplify your position’s potential gains?

I think whale, or even the platform itself, would probably open large positions on the opposite side to intentionally liquidate the “winning side”, and then enter positions afterward to profit again

What will should still know is that we are gambling. So taking high leverage might still coming back to hurt you despite your conviction to win, it could still go wrong and you regret your decision to gamble with high leverage. I would still stick to a moderate way to gamble and take it one step at a time according to how I can bear my loss and not to put myself in a situation of had I know  ;D

Gambling is risky and to take leverage to increase risk is taking more risk.

Using a double edged sword in gambling doesn't really seem to be worth the risk to me, Leverage will cut both ways so don't just think you are going to increase your winnings exponentially because the same thing will definitely happen when you lose and believe me you are not ready to have that conversation, best to just stick to the classical way of gambling and risk what you can lose, if you win then good, if you lose then it just wasn't your time to win, this is a better alternative than losing all you have to a single gamble simply because you were hoping to turn your financial life around with a single move.

That can make me greedy ;D

It is enough to use leverage in trading. I will not use it in gambling.

But as you say, whales may use that leverage especially if they are sure of the outcome. I agree with what @palle11 said that gambling is risky and using leverage gives bigger risks.

If you're ready, you can try it and see the outcome. I hope you will win big.

We have to be careful not to allow all these offers to bring out the greed in us and tempt us to take the risk we couldn't have attempted on a normal day, because at the end, it does not change anything about the fac that we are going to win or not, which should be our most area of concern, i do weigh the cause of some of these offers before making decision.

How does leverage really apply to gambling? Please it's an honest question.

Does it affect the balance after loss or you owe the betting website and repay upon winnings or pay small small?

That's going to be a lovable feature for many gamblers since they would think that they can use the opportunity to boost their winning amount, but don't realize that the higher the profit, the higher the chance if losing too. If this is added, even the chance of winning trades on exchange will be very much better than on those platforms. If they add such feature to the platform, those that love to earn huge amount with small bet can take the advantage to set a very huge leverage on their bet, so that the winning is going to be big.

Lol, so what happens with your "losing" positions in this scenario since you bought that many of them to liquidate the "true winner" and now you're stuck with a ton of overpriced shares of a losing bet?
Seriously, think at least one step further when you uncover a money-making machine!

This is complicated on the part of liquidation calculations. Your bet will be liquidated when certain score meet under specific time is a bit complex for the bookie to do.

I believe this is the limitation on how you can apply prediction market to sports since it’s not like trading that only based on price action.

Btw you can borrow money on lending DeFi protocol and you can use that extra money as way to increase your wager that works like minor leverage.

i think this idea is a bit exaggerated, but it's not impossible. after all, platforms like polymarket and kalshi offer an experience that's a mix of a gambling site and stock trading. but because every user can offer their own bet, you have the opportunity to bet on such interesting things that i don't think it will remain very reliable if leverage is added to some already questionable types of bets. still, such a choice could result in the platform making more money.

Gambling's always a risk, and adding leverage just cranks up the risk even more. Even if you're super confident, the market can still surprise you. High leverage can boost your potential wins, but it can also amplify your losses. So, it's a good idea to keep things moderate, take it one step at a time, and only gamble what you can handle losing. This way, you won't end up regretting your decisions later. It's all about staying smart and keeping your risk in check.

So now I'm also going to start looking at market manipulations like liquidity sweeps in Polymarket? Sounds interesting.

Of course, if leverage is available, even big players will use it to their fullest potential. What you need to note: Prediction markets are "fair" only as long as there is no leverage.

You're absolutely right, using leverage in gambling is like wielding a double-edged sword. It can cut both ways, and while it might seem like a quick path to bigger wins, it can also lead to massive losses just as easily. It's not just about the potential for exponential gains, you've got to be ready for the possibility of losing big too

Just like in trading on CEX/DEX, when using leverage, you're basically borrowing money from the platform so they can give you a bigger margin/capital and a bigger PNL. In return, you will be liquidated/SLed if the odds go too low, even if your chosen option wins. You don't actually owe the platform anything if you lose, since it'll be something like "isolated margin" when trading. And a certain amount of your capital will open a position, and the platform will take it if you lose

This will turn many players to poverty in my opinion. Gambling alone is not easy to win because it is designed against the player that is why the business is flourishing. Adding leverage will make players lose more money at an alarming rate. I don't know how they will implement this but it will surely work against players which is why I will not support something like that and even if it is implemented, I will never advice anyone to use leverage in gambling.

How would leverage work in this case?
I can't quite picture it here

Predictions are already risky by nature, and adding leverage would certainly bring even greater risk
In the crypto market, leverage has been used by big players to liquidate many people
With the right information, whales have a significant advantage

I hope they don't implement any of this in prediction markets  :)

That's a great point about the appeal of leverage for gamblers. Many will see it as a chance to amplify their winnings, but they often overlook the increased risk that comes with it. The allure of potentially huge returns can blind them to the fact that higher profits also mean higher potential losses. If this feature is implemented, it could indeed make the chances of winning trades on the platform more attractive compared to other platforms.

This would even be more troubling IMO. Having the chance to multiply your wins and losses could really grow exponentially. It's a double-edged sword that could damage a lot of people and have more people gamble, thinking that they would have a chance to change their lives with gambling. It's not a great idea IMO.

If you are a whale, your winning PNL will cover the capital used to open a position on the losing trade by liquidating them and taking their position

Hypothetical example: Will Trump Win the Presidency in January 2025?

Let's say the odds were something like 90% Yes, 10% No

And there are a lot of leverage positions for Yes, and their liquidation is in the 60-80% area. If you open a No position with leverage and huge capital, and liquidate the Yes positions, the odds of Yes can go as low as 10-20% after you liquidate them. Then you can start placing a Yes position to have a bigger PNL, and the odds of Yes can return to 90% or more.

If you are the platform, you will get back your capital on the No position after your Yes position has won with the same strategy

I hope this makes sense to you

They are already making a massive amount of profit on their platform with the odds they set for each game and activity of bet. Why I think this might not happen is because they are not operating like those centralized exchange that offer leverage, you know that the leverage can also make it possible for the platforms to lose massive amount from gamblers that used huge amount to bet with big leverage too and successfully win the bet. Gambling already has a high risk of liquidation and the platforms are already making so much money from the odds provisions, so I don't think they will add leverage features.

Leverage option in gambling?! That's a very strange idea to me!

If I don't use leverage in trading, how could I use it in gambling? Gambling itself is risky, and leverage would multiply that risk many times over. That's extremely dangerous.
I would never even consider using it.

Nope, it doesn't because you throw numbers around without doing even a bit of math and saying that because you put more money in this than you make more money out of that, lol, if things were so easy, you would have been a millionaire by now, which obviously..

Do the math on pushing something from 90% to 60%, you need to add more money to the table than the entire market, so you're betting half of the money on a losing side, and this without anyone taking advantge of the yes position that gets more profitable,  now, how do you plan on covering this from the bets on the market, because once those guys are qualified the whole volume will dry out to your own capital, so you're basicaly winning the money you put in minus the money you wasted!
Seriously, think for a moment!!!!

Maybe sooner or later your idea will went true.

We have leverage in trading, so why we don't have it in gambling right? as long as the gambler willing to take risk if their bankroll went to 0, the casinos can easily set it even though I don't know why people need to have leverage.

If they want to earn bigger and risk bigger, they can just raising their betting amount. ???

Thinking of this for a bit, it's funny, did you forget that Polymarket and Kalshi are in charge of paying winners while losers losses are profits to the platform? You are explaining this as if it's trading you are talking about, polymarket games is not like price prediction and in the case of trading, you are dealing with the flux of the crypto price while here on the polymarket you are betting  not based on the flux on price, so I don't see how the platform can activate this plan of yours, or did you read about the information somewhere that the platform have intension to employ this method?

Using leverage or introducing it in the predict market would be a great blend but there are risks involved both from a theoretical standpoint and from a retail investor standpoint.
Only the more confident traders can have the mind to apply leverage in predictions markets like Polymarket or Kalshi, but the truth of the risk involved could far outweighs the benefits one stands to gain, because as we know, leverage helps to magnify both profits and loss.

Cmon, do you think that you lose not enough?  ;D  If you don`t get enough odds - bet a parlay.
In casino you have all opportunities to lose your money. Why do you want to add one more else chance of loss?
If you sure in some result - increase bet. If you need higher odds - make parlay or choose more risk event.
You don`t need leverage to lose your money. You have all you need.

I know few bookmakers that give bettors odds boosting games, this way you select those game's thatvare qualify for odds boosting.
What you must know is that those games i mostly high risks games and this the casino is aware of and make use of such facts, such games region in betting can be said to be similar to leverage trading that you can increase your number in figure x.

Yeah, they can do it and can totally whip you out in just one bet. They are not just increasing the risk but also changing the game from betting for an outcome to betting against other bettors. You can be profitable, but you will be the loser because they won't let you win the bet. This is not a new trick, it is mostly used in crypto and forex trading, where these whales can change the whole situation. Similarly, if they start it on real world events, then it won't be predicting the results, but it would be predicting when a whale will liquidate the whole sports market. So, leverage seems like a good and exciting idea, but it will be like a nightmare for the players.

It would not work that way, since prediction markets are not the same as trading or gambling with future markets. The outcomes of predictions are binary, so that means the casino or the bookie would be likely to lose their leveraged position as well. Because in the trading market, the price of assets can be influenced by supply and demand upon them, however the outcome of predictions do not have anything to do with the movements made by those betting on what could happen or not.

Leverage is possible, but manipulation would be difficult, way more difficult from what we see going on cryptocurrency trading.

Prediction markets are barely legally permissible as it is. If they start adding leverage and market manipulation, they won’t remain legal for very long. You could still leverage your position by borrowing money from a source independent from the prediction market and buying shares with the borrowed amount. It would be a foolish idea to try it, but it is still possible.

The outcome will most likely be a nightmare for players, as it feels like betting against whales who can change the result at any time through manipulation, just as they do in cryptocurrency futures trading.

Therefore, I believe this idea is not in the players' best interest but rather in the interest of the whales and casinos, because the casinos will profit from the bets regardless, as will the whales who control the rules of the game.

Exactly, mate. The prize is the small bettors for both the casinos and the whales. No matter who wins or loses, the casinos take profits from the commission, and the whales from market manipulation. The small players are the ones who take all the losses on themselves. It would be better to say that both casinos and whales screwed the small bettors from both sides. So, in this case, the players need to keep their hands in their pockets until the situation changes and a fair system begins. Or at least they can place their bets where they can get the presence of one, so they can make some profits, otherwise, they will be crushed.