Prediction Market with Leverage

[0xAysaya]

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

[palle11]

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  

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

[ZeroVinsonN]

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.

[michellee]

That can make me greedy

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.

[348Judah]

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.

[Sammye3]

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?

[Dr.Bitcoin_Strange]

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.

[stompix]

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

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!

[AbuBhakar]

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

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.

[blomen]

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.

[0xAysaya]

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  

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

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.

[rat03gopoh]

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

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,

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.

[0xAysaya]

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.

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

[0xAysaya]

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?

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

[Moreno233]

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.

[rdluffy]

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  

[0xAysaya]

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.

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.

[crwth]

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

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.

[0xAysaya]

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

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!

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

[Mrbluntzy]

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

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.