Election Odds Fluctuate Rapidly in Prediction Markets

The real-time election odds on prediction markets can be misleading for crypto traders. The prices available when they open the app may change by the time they try to buy, especially during news events that prompt other traders to rush towards a particular outcome.

A company called DoubleZero has added Kalshi's election and politics markets to its Edge service, which delivers trading data over a dedicated network. This allows professional trading companies to offer better prices, potentially passing the savings on to customers.

The price of a yes-or-no contract on Kalshi is commonly interpreted as a 60% probability, but costs and trading conditions can erode that number. Traders can earn profits by predicting the next buyer's willingness to pay, regardless of who wins the election.

A faster feed of market activity, such as the one provided by Edge, can help traders make more informed decisions. However, this advantage may not be significant for independent traders and could even create unequal capabilities between large companies and individual users.