Thoughts on using event contract to hedge or trade high impact events risks?

Discussion in 'Fixed Income' started by Kalshi, Apr 26, 2023.

What will the FOMC target rate be post June Meeting?

Poll closed May 26, 2023.
  1. 4.75%

    0 vote(s)
    0.0%
  2. 5%

    2 vote(s)
    33.3%
  3. 5.25%

    2 vote(s)
    33.3%
  4. 5.50%

    2 vote(s)
    33.3%
  1. destriero

    destriero

    I am going to vent here, again.

    https://kalshi.com/markets/cpicore/us-core-inflation#cpicore-23jul

    Core CPI >0.1 Buy

    So ofc I paid 52/100 for the thing. Resolved to the hundredth (confirmed) so, ostensibly, I earn from 0.11 to 0.19 (as there are range binaries above; 0.2, 0.3, etc)

    OK, so any reasonable person who wasn't born yesterday would read that range-digital to payout from 0.1 to 0.19 (as there are range binaries above and below; 0.2, 0.3, etc), and they use BLS-convention or reporting to the hundredth.

    No, it pays on YES above 0.16. 0.15 (mid) is the hook. I don't know it that's a push or the House wins, but no matter.

    The >0.2 YES (pays above) is priced at 11/100. Assuming that it only pays from 0.21 to 0.24 as 0.25 is the hook.

    Per Luana's explanation of the payout convention. I honestly don't know if the thing pays on the hook (x.x5) or it's a push.

    I have contacted Eugenia V at the CFTC with the rules regarding the binary. I cannot fathom how poorly this sht is structured.

    The digital rallied and I covered all at 52 for a scratch.
     
    #41     Aug 9, 2023
  2. destriero

    destriero

    So WTF don't they simply offer a digital struck at consensus? 0.15. People can actually decipher the payout. Make consensus the hook and push a 0.15 figure and bets are refunded on that figure less comms.

    Funding this place is an IQ test.
     
    #42     Aug 9, 2023