Prediction market versus trading

[KingsDen]

To you is binary option can be called trading or gambling? It is good that most crypto users can access it with the use of crypto as the products, unlike how it was before and it is different from the Options on exchanges.

It is gambling but if anyone calls it trading, they might not be mistaking. I said so because, in gambling you depend solely on luck when the game starts but in binary options, it is also lucky and a little bit of fundamental awareness. That fundamental factor is where the percentage of trading comes in.

If someone is on binary now and understands that in few minutes time, Trump will make positive announcements about bitcoin, he will definitely be going one direction and will win alot compared to someone who doesn't know about the news. That influence of fundamental awareness is where I think the trading option came to play.

Now I'm curious, let's say a person uses Prediction Market / Binary Option. Can you consider yourself a trader for doing either of the two?

For me, it's kinda new if you can still call yourself a trader by just doing that.

[Peanutswar]

Do you know that you can make bitcoin price prediction on prediction markets which can be from a duration of 5 minutes to days? This is just the same as binary option.

Are there traders that like binary option? Prediction market said they are trading platforms than gambling but in the past, most of us traders were calling binary options to be gambling even before the establishment of prediction markets.

I have also seen the binary option on a centralized exchanges which I bright to this trading discussion board few months ago but which is called Event Futures on the exchange. I still think that binary option are gambling.

To you is binary option can be called trading or gambling? It is good that most crypto users can access it with the use of crypto as the products, unlike how it was before and it is different from the Options on exchanges.

Once we say its a binary its considered as True or False: 1 and 0 so basically its equivalent for all-or-nothing game so this is aint trading but instead a gambling so for those people who predict the price they will place their guess and if its binary only has a win or lose chance but when it comes in trading if you are such kind of trader make a position into a 5 to 1 day time frame possible you will make a cut losses or make a win with your capital and leverage. So basically for me its a gambling and not a trading unless you are a well skilled trader wanted to test out your knowledge and skills so basically you are playing gambling with a higher risk return than with your usual trading strategy.

[Charles-Tim]

Once we say its a binary its considered as True or False: 1 and 0 so basically its equivalent for all-or-nothing game so this is aint trading but instead a gambling

Yes, binary options are gambling, but have you bet on any prediction markets before? It is not just a binary option but it is in a way that is also similar to trading. It is not all-or-none until the time the prediction toend has been reached and the money get liquidated or all is lost.

If the final time has not been reached, not all the money has been liquidated and not the money has been won.

Just try it on a site like Polymarket and understand what I am talking about. I will still say it is gambling, but it is also trading, so best to call them prediction markets. How prediction markets are, they are slightly different from binary options.

[cxtreenal]

There are some centralized platforms that promise to make you profit, basically they involve you in speculative trading. I had a newbie trader come to me for advice but I first told him about the negatives versus the positives. He listened carefully and went back and started trade with a limited amount of funds. That newbie trader made a significant amount of profit with that method or trading platform. I think he was lucky enough to make a profit from speculative trading/gambling and in a very short time his profit exceeded his capital. He thanked me for the advice because he took risks with funds he could afford to lose.

[dansus021]

I actually reply to many threads about prediction market, this is based my experience that prediction markets are just gambling with a style haha.

Basically, anything that has a final outcome could potentially be a prediction market data, and yes I do agree with you on any prediction market from polymarket, limitless, kalshi all have same bitcoin price up and down and also yes that is binary option but have chat and comment feature and you could do both ways at the same time.

To me binary option is more like gambling because most of the binary option using a low timeframe data like 1 minute to 10 minutes time frame that basically is hard to predict at the smalles time frame lot of noises from techinal analyst and this is pure gambling IMO

[cryptoaddictchie]

A market that is more of a trading platform is definitely a bait to get gamblers into the predictions market.

As long as you have a time duration for your bitcoin price predictions, it means you are gambling and not trading.

A leverage future trader is more related to this prediction market, but those trading the spot market can be said to be gambling since they can send out their bitcoin regardless of the price.

Thats exactly what prediction market trying to do more of like a future trading. Honestly its like a new term that has been tweak a little tobhave a new narrative. What only differs is that pmon future trading your dealing with assets like bitcoin and eth while prediction market is pretty much conbination of all like any topics can bet on even sometimes their not totally realistic or so predictable.

[Hamza2424]

To you is binary option can be called trading or gambling? It is good that most crypto users can access it with the use of crypto as the products, unlike how it was before and it is different from the Options on exchanges.

Yep I know about the prediction market but bro I don't think we should be predicting there, trading on exchanges is better than betting. Because it is like betting, if we lose we lose, correct me if I am wrong. But when trading, we can trade and can lose too but we don't have to lose it all, we can book the profit or loss whenever we want.

Binary option is not a good form of trading, it is also a win-or-lose situation, better to be avoided. Because it is highly risky and we can lose our funds in no time although we can win too but this will develop a betting addiction in us.

[Alphakilo]

To you is binary option can be called trading or gambling?

Binary Option is 100% gambling, and not trading. The trading aspect has been stripped off when a time expiration is introduced. That is a constraint that has to be beaten, which further put stress on the trader's psychology and ease of making a decision.

It is good that most crypto users can access it with the use of crypto as the products, unlike how it was before and it is different from the Options on exchanges.

I'm indifferent here. Whether it's good or not depends on the user, as it's not forced on anyone.

Am going to second you in this one, because I for one, see binary options as another kind of gambling but the difference between this kind of gambling and that of sportsbook or casinos is that, it is more of financial gambling.
We can apply different mathematical models like the kelly criterion in the short term as opposed to spot or futures trading which offer long term edge.

It's also obvious that a user or customer's perception matters here because, no one can force anyone to indulge in it and am sure that the regulatory policies surrounding the predictions market although not strict enough, is very different from that of binary options.

[Strongkored]

To you is binary option can be called trading or gambling? It is good that most crypto users can access it with the use of crypto as the products, unlike how it was before and it is different from the Options on exchanges.

I thought so too, especially after seeing several gambling sites offer this type of game. Even one major gambling site, which is now offline, had it, and I often used it to bet on crypto market predictions.
Binary options in my country were once a major scam because many members didn't realize the prices on the platform were manipulated, so they didn't reflect real-time global market prices.

[Creeper0]

Binary options have various characteristics of gambling, so we can call it gambling. Candlestick prediction of a certain time is undoubtedly a part of gambling, it cannot be traded in any way. I am not a binary trader, but I have observed binary from a very close distance. It is like placing a bet, pressing the up-down or yes-no button based on some information or statistics. After a certain time, they publish the results. The biggest sign of gambling in binary options is that it is dependent on luck. No matter how much you use statistics or information, you cannot win if luck does not help.

[SamReomo]

Binary options in my country were once a major scam because many members didn't realize the prices on the platform were manipulated, so they didn't reflect real-time global market prices.

Many people lost money by going for Binary options, back in days the social media influencers promoted those scam sites to their viewers and they were getting paid for that. Nowadays, most people know about the Binary options and they avoid those at any cost.

Personally, I've lost some money in those Binary options during 2015-2016 but after learning about those platforms I gave up on those, well the losses weren't much to be honest but I learnt someone very useful after those losses.

[Pressurizedem]

I think the both of them are very complicating and hard to get because both of them are not what you can be sure of. Prediction is more of luck but you still have to put in your effort by watching the games every single day to know the form of the teams and to know their head to head performances in other to know the right option to choose, while trading follows a particular pattern of studying the market and studying the coin to know the right time to deposit or invest in other to make profit or gains.
However, the both of them are very risky, and if you aren't careful, the both can ruin your life, that's why you have to follow it with caution, don't invest more than you can afford to lose. Bet or trade wisely to avoid had I known.

[NotATether]

Binary Option is 100% gambling, and not trading. The trading aspect has been stripped off when a time expiration is introduced. That is a constraint that has to be beaten, which further put stress on the trader's psychology and ease of making a decision.

It's a binary option but the probabilities also have worse risk mispricing, because there are less traders on Polymarket than e.g. Binance.

That means it is possible that the price you will enter in order to trade on the binary option could be worse than if you just opened a position on a CEX.

It makes a huge difference, and some people wrote bots to find and exploit such differences to take profit, so don't think about trying to arbitrage the market.

[Alpen]

Do you know that you can make bitcoin price prediction on prediction markets which can be from a duration of 5 minutes to days? This is just the same as binary option.

Are there traders that like binary option? Prediction market said they are trading platforms than gambling but in the past, most of us traders were calling binary options to be gambling even before the establishment of prediction markets.

I have also seen the binary option on a centralized exchanges which I bright to this trading discussion board few months ago but which is called Event Futures on the exchange. I still think that binary option are gambling.

To you is binary option can be called trading or gambling? It is good that most crypto users can access it with the use of crypto as the products, unlike how it was before and it is different from the Options on exchanges.

I have personal experience trading binary options in the Forex market. I’ve used various types and even performed arbitrage across multiple platforms. I’ve noticed that arbitrage in prediction markets is becoming trendy again, and it’s even more effective now if you leverage AI.

Aside from arbitrage, everything in binary options is just gambling. The expiration factor makes price forecasting almost impossible to predict accurately.

If I buy crypto for growth, I can afford to hold through a drawdown, even if a geopolitical shock like the Strait of Hormuz occurs. I can even stay profitable during a dip—take my TRX, for example, which is staked at 20% APY on Cryptomus. But a prediction market contract will simply expire, potentially leaving your pockets empty

[knowngunman]

Now I'm curious, let's say a person uses Prediction Market / Binary Option. Can you consider yourself a trader for doing either of the two?

For me, it's kinda new if you can still call yourself a trader by just doing that.

Lol, you want to outsmart the question here. To some extent, I think Yes, you can be call a trader.

Literally, you're trading using any of these platforms but it mostly depends on what you're actually doing. Prediction Market is mostly events trading and some time you need to make use of analysis, manage risk just like traders. Even with limited time frame on binary options, it's technically trading.

People call traders gamblers and vice versa. This is not surprising either.

[OsaiEmma]

Do you know that you can make bitcoin price prediction on prediction markets which can be from a duration of 5 minutes to days? This is just the same as binary option.

Are there traders that like binary option? Prediction market said they are trading platforms than gambling but in the past, most of us traders were calling binary options to be gambling even before the establishment of prediction markets.

I have also seen the binary option on a centralized exchanges which I bright to this trading discussion board few months ago but which is called Event Futures on the exchange. I still think that binary option are gambling.

To you is binary option can be called trading or gambling? It is good that most crypto users can access it with the use of crypto as the products, unlike how it was before and it is different from the Options on exchanges.

Here is what wiki says about binary options

A binary option is a financial exotic option in which the payoff is either some fixed monetary amount or nothing at all. The two main types of binary options are the cash-or-nothing binary option and the asset-or-nothing binary option. The former pays some fixed amount of cash if the option expires in-the-money while the latter pays the value of the underlying security. They are also called all-or-nothing options, digital options (more common in forex/interest rate markets), and fixed return options (FROs) (on the NYSE American).

I don't think binary options is fully gambling with this definition. Then, is trading also a type of gambling? But, binary options is definitely not like our traditional trading, and same goes for prediction market.

Here is what wiki says about prediction market.

They are exchange-traded markets established for trading bets in the outcome of various events.

It is both a bet and a trade, but the link tells more about what a prediction market is anyways.

In terms of gambling, it is about risking something of value (stake) on an outcome with the intent of making profit, this definition is somewhat vague cause it covers both trading, investments, business, e.t.c cause anything that involves putting money on a risky asset or business to make profit could be interpreted as gambling with this definition.
In other words, we can say they're all gambling lol.

But are they? Not really.

I think the main distinction is in their structure, trad trading is not just 0 or 100%, yes or no outcome. It is all that and everything in between. Gambling, prediction market and binary options, have one thing in common, and that is, it is either u loose or you gain, no in betweens, but prediction market and binary options have somewhat different system, their system is similar to trad trading and that's why the seem to be in-between.

[crwth]

It's just gambling, IMO, in terms of risking money. The biggest difference is ^{(aside from the fact that there are fees to pay in trading)} the Expected Value or EV is negative for the user in prediction markets and binary options.

Imagine this: winning 50% of the time. The amount you win isn't exactly 100%; it's less than that. BUT if you lose, you lose 100%.

It's just gambling IMO.

[Oshosondy]

A binary option is a financial exotic option in which the payoff is either some fixed monetary amount or nothing at all. The two main types of binary options are the cash-or-nothing binary option and the asset-or-nothing binary option. The former pays some fixed amount of cash if the option expires in-the-money while the latter pays the value of the underlying security. They are also called all-or-nothing options, digital options (more common in forex/interest rate markets), and fixed return options (FROs) (on the NYSE American).

I don't think binary options is fully gambling with this definition. Then, is trading also a type of gambling? But, binary options is definitely not like our traditional trading, and same goes for prediction market.

Here is what wiki says about prediction market.

What Wiki is explaining is that binary options are gambling. On gambling sites, it is about all or nothing. I understand that there are some gambling sites that you can see cash out but the cash out is very centralized in a way that it is not like how it is on prediction markets that it will always be their but reducing as someone is losing.

[Emitdama]

It's just gambling, IMO, in terms of risking money. The biggest difference is ^{(aside from the fact that there are fees to pay in trading)} the Expected Value or EV is negative for the user in prediction markets and binary options.

Imagine this: winning 50% of the time. The amount you win isn't exactly 100%; it's less than that. BUT if you lose, you lose 100%.

It's just gambling IMO.

Even trading is like a gambling too because as you said there it has fees as well. This is what they say that nothing is free in the world and a business charge fees in order to profit too. That should not be a big deal, especially if we also want to profit or had profited already. I would be happy now and celebrate my wins than be sad and still think about this stuff. 

Anyways, I don't really know what EV means but is this like odds too? Or if prediction markets and binary options are more prone manipulations? But I think they are not far away from sports betting, and far away from casino games. This is the ones that truly had the control.

Speaking of odds right there, odds can also affect our winning amount. So it can be high or low too. But in a normal odds game, I don't think we can only harvest 50% for our staked money. It must still be higher than it I believed.

Again odds, apart from the fact that it can affect our winning, it can do the same with our losses. In some games like Plinko, if the ball falls on some multi, you won't totally lose 100 percent of what you bet though.

[sergiorus]

It's just gambling, IMO, in terms of risking money. The biggest difference is ^{(aside from the fact that there are fees to pay in trading)} the Expected Value or EV is negative for the user in prediction markets and binary options.

Imagine this: winning 50% of the time. The amount you win isn't exactly 100%; it's less than that. BUT if you lose, you lose 100%.

It's just gambling IMO.

Maybe technically it is gambling, but it sucks as gambling because it's slow and doesn't give that fast dopamine on which people are willing to spend money.

It gives a tool for many non-fintech entities to hedge against certain risks though, apart from insurance there hadn't been such a tool before.
Also it's a paradise for all kinds of insiders, especially government/3-letter agency insiders.