Managing Risk Hidden Risk on Prediction Markets | Ep 155

Record breaking episode for most questions asked - if you asked a question and we didn't get to it, it's because this episode would have been 4 hours and we will answer on our next solo show.

Today SP and GP talk about the non-obvious risks on prediction markets. As bettors we all are aware of bankroll management and betsizing tools like Kelly. But in this new world, there are more threats to your bankroll looming around every corner and being defensive is the game.

We touch on FanDuel and DraftKings getting into the PM space as market makers on the exchanges - and have another great Mr. PeanutBettor question of the week.

0:00 How we define risk on PMs
10:40 Listener Risk Qs
1:28:40 News
1:48:00 Random Listener Qs

Welcome to The Risk Takers Podcast, hosted by professional sports bettor John Shilling (GoldenPants13) and SportsProjections. This podcast is the best betting education available - PERIOD. And it's free - please share and subscribe if you like it.

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Transcript

SPEAKER_03 0:00

You have a really bad day, and you're like, okay, that was probably too bad of a day. Let's not do that again. What do I need to change to make sure that doesn't happen again? And that's like, you know, like if I was doing if I was doing combos, like that's basically what I would do. Because I would guess what I think my parameters should be in terms of like per leg exposure, um, per combo exposure, like maybe two, three, however many, like to say I want this much on this type of combination and this much on per leg. And you'd probably be pretty aggressive on that, or at least I would be. And then something like bad would happen, and I would look at it and be like, that was probably too much, and then I dial it back to get it like how I want it. And it's like an ever-evolving process.

SPEAKER_01 0:44

I think that basically just works. Got a ton of questions today. A ton of questions today. Could be a record.

SPEAKER_03 1:13

I think it's definitely a record in terms of questions.

SPEAKER_01 1:15

Felt like a record. It's good though, because it was the first time I think that we put out like this is the topic, and then people ask questions on that topic. So I don't know if that could be something we do going forward or yeah.

SPEAKER_03 1:30

I I was thinking the same thing. We usually give no inkling of what we're gonna talk about, and then you know, we get questions, which is is sort of good because it breaks up the show. Like we do something we talk about something in the beginning. So I think what we're gonna do today is try and um we'll, you know, our main topic were will overlap with the a lot of the questions we got. Um, there are be some questions at the end that are are maybe less related. We might not get to every single person's question this week, um, but we will get to all the ones related to our main topic, which is uh broadly managing risk on prediction markets. So the fact that we got so many questions leads me to believe a lot of people have um you know lost a lot of money not managing risk on on prediction markets. So um, yeah, do you want to do you wanna kick us off with how you how you're thinking about this?

SPEAKER_01 2:16

Absolutely. Well, I see you put in an intro um Chris's uh point of view, he's a very successful prediction market trader. He says, why do you need to manage risk? Just ride the variants and don't be a pussy. Um, so I guess that's a good starting point. Is like, why do you need to to manage it? Uh, I think we obviously we know Chris is was joking, but he's probably as close to a full Kelly better as as we have in the industry. Um But yeah, I think there's just a lot of different types of risk. Um there's the Kelly like bankroll risk, which is actually I think the easiest type of risk, kind of, because you have it's like solved, you know. We have Kelly, you know, you can quarter Kelly at half Kelly it, you understand the inputs to Kelly, and you can kind of like vibes-based Kelly as as SP would say. Um, and it's you're basically going to be fine. But the the other risks are are pretty tough. Like another one that we know about in gambling is counterparty risk. Like, will you get stiffed or you know, playing on a certain place? I I think like we can skip that for prediction markets because at least the main two like have a lot of money still. So I'm not too worried about counterparty risk. But you have some some other risks in PMs that that don't come about in traditional betting, which uh specifically I would say adverse selection. Uh obviously, there's some of that in traditional betting, it's a little different. You're more like whatever's, you know, in traditional betting, it's like, oh, if I have if my price is still there after, you know, a day and I bet it, I'm getting adversely selected. Little different in PMs when you're posting a lot of liquidity and like you're quickly getting adversely selected. Um, then there's what I guess I would call like program risk or automation risk. So we'll talk about you know, night capital, a famous example of this in the in the stock market, but basically like a bug in your code, like punting off all your money uh automatically to somebody. And then I would also say like exposure risk, correlation risk, like this, but this bro generally, like um, am I overexposed to any one specific either actual bet or like one you could think of it as like game script, like way a game plays out, or or something like you know, what is if if like the Chiefs win by 30, do I have like no money anymore? Even though like I have like 40 different bets, they're all very vulnerable to that game script. So, and then you know, we can talk, we'll talk about some SGPs and and whatnot as well. But that that's kind of how I'm thinking about it.

SPEAKER_03 5:13

Yeah, I think I think breaking up like the types of risk and and like highlighting the ones that are newer. Okay, we don't even have a guest to blame, and that was a world record for the the early technical difficulty we had. Um, but what I was gonna say before that was I think breaking up the types of risk and introducing like talking, highlighting the types that are newer with prediction markets or like are more emphasized, I guess, with prediction markets is is definitely like the the way I thought this conversation was gonna go. And so I we've got a ton of questions, and I think each question, like as we sort of parse through them, I think we're gonna hit on all like the key topics I would have talked about on this topic, just like as is. So maybe just like to give a brief overview of like some of how I think about this before we get into some of the questions or anything else you wanted to share before getting into some of the specific questions and then just letting that conversation go was like the way I think about the risk is it's like not just like you know how much how much money you're gonna lose or anything. Like I think that's where everybody's head goes first, but it's really about like managing risk is also just like making more money, like basically like not making mistakes, getting better fills, getting better better prices, like all these things. So, like, you know, I know Chris's question was a joke, but it's like to me, this is is is more of a con it's not just a conversation about variant, it's about like managing your vulnerabilities so you make more money, right? It's not it's not just about like just bet good numbers and let the chips fall where they may. It's like you can do better if you manage risk better. So, like some of the levers that I think I I think we alluded to this at the last show or two shows ago when we had a question or two on this that sort of spurred this um, this topic was like specific to prediction markets. I think the one lever everybody always like immediately thinks of is like, what's your limit? Like, how much are you willing to take on this side on a prediction market? Like that's that's what people think of as risk. That's like the very obvious ones, obvious one. I think even that is more complex, and we'll get to some of the examples of like your max risk. What is that? Is that max risk per event? Is that max risk per strike? Is that max risk per side? You know, when you get into some of the the RFQ stuff, it'll get even more complicated. But like that's one lever that manages your risk. Um, some of the other levers are like the the spread, you actually quote, um, in any market, because what that that that is basically your tool to allow you to control how much flow and what type of flow you get. Um, so while it's like not, you know, I don't think a lot of people would directly think of like the spread, meaning like, am I posting four cents wide, two cents wide, one cent wide? Like they don't necessarily think of that as being a spigot to manage the risk. I actually think that's like a very important one in terms of like the flow and the type of flow you get. We'll talk about that a little bit on sort of the first question, I think. The other things, um the posted size. So that's obviously different than then your max, or it could be different than your max limit. So let's say you're willing to take uh 10,000 shares on a side, but you there could be good reasons to post the full 10,000 right away, or post, you know, a hundred shares at a time, depending on the market and the situation. We'll talk about some of that. But that's another really um important way to to manage your risk, your downside, you know, like when prices move, all these things. Um, and then the last thing that is probably like more very specific to like what you're doing and and how it plays out is just like your if it if you're doing some anything automated, like the refresh timing or how often you're like like the actual latency and timing of it all. Um, because you might, you know, it might be you might be sitting there and thinking, oh, I just want to be like as real time as possible, like always capturing the odds moves, just as real time as possible. But there's real downsides to that too, in terms of like jumping around andor like if there's a big move, like you could imagine if you're let's say you're doing something live, there could be a very real reason you don't want to be posting every millisecond, right? Like if a goal is scored or something, maybe you want some like cool-off period potentially. And so there's decisions about like the refresh timing that I also think helps um, you know, manage your risk. So those, those are like the levers that like when we're talking about um, you know, each one of these questions, and we have questions on like live and pregame and the combos and you know, just broader points about how to avoid downside and not get adversely selected. Like those, those are all the things that like I'm thinking of that you can control that can help with some of this stuff.

SPEAKER_01 10:13

Yeah, I uh I like all that. The refresh time is is actually super key if you I think it'll it'll will that will come up a few a few times, but that's something that I haven't talked about or have heard talked about. So I think that's that's a great point. And uh it'll be interesting to to get into these. So I guess we can get right to the cues because I I think that those are that's a good setup, and everything will kind of come out as we we answer these things. So I can read the first one from uh a longtime question askerslash previous guest, uh Josh Royale. What is your approach to market making live and not getting crushed crushed by courtsiders? The bidass spreads for sports like baseball can be pretty tight with 10k shares put up one or two cents wide, and data feeds can only be so fast to combat courtsiders in high leverage spots. I imagine the main defenses are just putting up small size on each play or widening the spread based on leverage of the game state. But if widening the spread, it seems like you'll not get filled a majority of the time, and simply avoiding high-leverage situations doesn't seem great either, since many games are closed from start to finish. Um and then he goes on to say, like, or is the live action so good, you can you can kind of just get a disproportionate amount of rec to to non-reck flow. I actually wanted to to quickly talk about the what what he said about widening the spread and specifically for live or in play. I actually think like widening the spread doesn't at it depending on like where you widen it to, doesn't necessarily help you live if you're thinking about courtsiders. It could actually be worse because you'll never get the rec fills because you won't be top of book, and then you'll just get clicked on the courtsider orders once like some something's happened. So like I think what uh Akash said, smaller display size, like that that's the the go-to. Um you basically are trying to get that ratio of of you know as much you want the ratio of like rec to courtsider will always take the max click. So whatever you have up, if a goal is scored or whatever, that's getting taken. So the less you have up, because recreational betters don't better as much, that basically moves that ratio of recreational action to courtsiding action in your favor, at least like it as much as as much as you can. So that's the first uh guardrail. But I would I would actually, this is a situation where I don't think spread helps you that much.

SPEAKER_03 13:10

Yeah, I think it's the um like it would be someone's I think anybody's like initial reaction when they're getting adversely selected in any of this is to be like, I gotta make it wider. Like I gotta post act, you know, I gotta, I gotta hold more margin. And I think what you said is exactly right, like how I would think about it. Like the goal is not to never get adversely selected, whether it be court siding or other, it's to have that be as small a percentage of your total volume as possible. And so if you imagine, you know, order book is one cent wide and you're, you know, three cents back, the only time you're ever gonna get filled is when something big and important happens, right? Like you're not gonna get action otherwise. And so that's a case where, you know, exactly what you said, like 100% of your action, your volume is like bad, goal just scored, home run just hit action. So I think that's like a big reason. I mean, we've gotten questions like how are people quoting so tight and everything? I think that's part of the reason is like there's no delay. If you're not quoting tight, you're gonna just get hit with the bad stuff. And so there's like this in this incentive in pushing it tighter and tighter. And like going back to levers, that's where like if you're dealing with something like court siding or slower data feeds, like one of the levers you can turn is the spread. You can tighten it. You obviously probably also want to turn the posted size down, right? Because, you know, a court cider, they're not price insensitive, but the price is like very far off, probably, of what you're posting. And so you want to give them as little as possible. And so that's where you know those those levers actually, the one sort of works in a counterintuitive way because I think everybody just thinks, like, you know, screw these guys who are taking advantage of me. I'm just gonna hold more. And it's like, no, that's actually like probably uh making the problem worse, like you said.

SPEAKER_01 15:13

Yeah, yeah, exactly. And I I think like the game state itself is interesting and high leverage. I mean, basically what you're you're trying to do is if you have if like you know that you're not fast, so like if you know that somebody could courtside you and you're quoting a strategy, you're basically looking to quote in spots where the price move, like the the price moves can there's not a lot of volatility, basically. So like you want to quote in a spot where like if something happens and you know you get picked off, it only you know the fare you're gonna be giving away like two you know one to two percent of EV because the fair doesn't move that much. So it's like an example of that. Like the NBA is an example of that. That now the MBA is a bad example of that because it's it happens all the time. So like a course setter can just sit there and like break. So you know that goes into the whole, you know, I guess like a macro risk discussion. But you know, a basket in the NBA in the first quarter is a good example of something that doesn't do too much. A goal in hockey, you know, in the third period, in a tie game, uh does a lot. You'll basically lose like almost a hundred percent. Um so you're trying to find situations where you can be you can quote and not take too big of a hit. So in baseball, for example, like your game state doesn't have to be like absolutely as fast as possible if you know you put in some simple rules where maybe you don't quote when once like runners are in scoring position. So you might quote for the first batter or something, or maybe the first batter matters a lot. I I I don't know. But like some like if I think like going after like thinking about that high leverage situation thing is the key, basically, and trying to figure out where you're willing to, like SP said, you're not trying to never get courtsighted, but you're just trying to make the equation um work so you're making a profit in the end.

SPEAKER_03 17:32

Yeah, it it's it's so interesting because each sport, like you know, and I've I've not thought through every single sport, like the the nuances of how I would attack them, but it is interesting because like some of the sports like like a soccer or hockey, which obviously I know you've given a lot more thought, like something like hockey. Hockey is interesting to me because the events are really, really meaningful, but they're very infrequent relative to like something like football or basketball, where there's events all the time, less meaningful overall. And I think like the dichotomy of those two, it probably both like require very different strategies. And like when I'm you know, like all the levers I talked about, like probably require very different strategies for those two things, um, you know, depending on the sport. But maybe let's go to Richard's question then, which was what are the ways to measure the ratio of toxic sharp taker flow to retail flow for market makers? What metrics or insights are you looking for once you have the numbers? So some of the stuff that I care about, and I don't think I think a lot of this is is been previously discussed either on this show or otherwise, is like some of the obvious stuff is like what percent, like anything related about like average fill size. So that could be like what percent of your total exposure, say you you've accumulated 10,000 shares on a side, or is that 10? And you're posting a you know a size of a thousand shares. Is that 10 orders at a thousand? Is that a bunch of 50, you know, 50 share orders? Um, is it sort of stream? So that would be one aspect. So like median fill, average fill size, like any of that stuff, I think is good. Um, obviously, like stuff from sports betting still works, like CLV and stuff like that. The other things I I think about, you know, just in today's market with like calcium stuff is like time of fill, what I'm getting filled on. Um, meaning I mean it like it, it's always been talked about like how recreational people bet at the last minute, and they bet on like you you probably have an idea of what things they bet on. Um, and I think we'll get to I think Metro Mike's question um was how many Scotty tickets can you handle before you turn off the faucet? Like to some extent, that is a metric I'm looking at. Like, if I get hit on on like something pretty obscure, like you know, NBA playoffs are going, if I get hit on some rotational player rebounds, I'm like, I'm not sure. Because it's just it's that it's funny, like it sticks out like such a sore thumb, you know. Like, doesn't it? It's funny like looking back at what we were. You know, like how are they just living with the second bet? You're like, how could they do that?

SPEAKER_01 20:29

It's like you're the only one who who bet like Brian Harmon bogeys under. Yeah, that's what I'm saying.

SPEAKER_03 20:37

Like, it's like because you know, at least my strategy is like, you know, taking taking stuff that like there's pretty close to infinite demand for, seemingly, on Cal She. And not that that like can never not, you know, not that could be bad, but just in a vacuum, uh, I I will feel more comfortable about that. So um, yeah, I think that's another aspect. If you're posting a lot of stuff, I mean, like, obviously, if you're posting, like getting into it and only posting on like maybe more niche markets, that's not something you can look at. But I think like understanding what people want to get bet, like if I was quoting combos or something, I I would know what types of combos I want to quote generally. Like if I got some weird, you know, like strange players or strange, like weird sort of correlation thing that like nobody else because like the things that are probably in the combos are like Aaron Judge to hit a home run and the Yankees to win. Like that's the I'm I'm guessing that can't be that bad if you're you're quoting that, probably. Um but it's like the more random stuff is is probably maybe less of a good sign.

SPEAKER_01 21:51

Yeah, yeah, exactly. I mean, I don't really have too much to add to that. Um besides I guess like what are you trying to to do with the information. Like if you're doing kind of you're you're trying to measure the the ratio. I think yeah you want to bucket by I like to think about it as like percentage of like if you ever get a max click because you might not have your full order out. Like somebody could have like nibbled away at whatever your like serum display size is. So you have to go into you can figure this out but like did I get taken for the max or not? And you can just kind of split it into max and not max and see what your ratio is there and just kind of test it against the the CLV. I mean this is starting to get like too this this is if you really care like you know test it against something like uh volume weighted average price uh of the whatever you're looking at in the next like 30 seconds or something like that or that's if it's live. If it's not live you want to do something different. So anyway these are some things you could do but just like max and not max is probably a good enough proxy as to uh like sharp and not sharp if you're trying to do some actual like ratio or math with it. And then if you're trying to like think about you know get information or think about stuff like everything the SP said is also what I'm what I'm thinking about if a Phil comes in, oh is that sharp? Should I do something with that? Like all of that is is yeah spot on.

SPEAKER_03 23:40

Have you had any examples where you know I I know we like to ask this of people who who've um actually like traded or worked at a sports bug have you had any like big examples or good examples and we don't have to get into this is sort of an unprompted question like of something you've not been clear like it's you haven't been sure whether it's good or not yeah there's like yeah there's like this big hockey better who would bet like pretty early and not get CLV and but like it just looked sharp you know like everything else like this like all the other like senses were just like spidey senses were sharp but like didn't get CLV um and I'm still not sure like if I had a gun to my head I would I would just guess sharp like you know it's like if it looks like a sharp and quacks like a sharp it's a sharp but like I just don't know how this guy wasn't getting any CLV.

SPEAKER_01 24:53

Wasn't getting CLV on Call She or on the regular um sports books.

SPEAKER_03 25:00

I don't know maybe it's like the ultimate like maybe this is like the the best hockey better well I mean I think you know more I I you know I have a mega mind take about the uh the MMA fight that we'll we'll get to in the news but like I mean at I at this point like there's way more liquidity on the predics than there is anywhere else. And so like if you were like if you were like NBO capable of doing this like it would behoove you to try I think yeah and that that's the other thing it's like this guy like won so that's another reason it's funny it's like me we have we have all these tells of like you know we can we can list like 10 different variables or factors for us to try and determine if it's sharp but at the end of the day if someone bets a lot of money we're like gotta be sharp. Has to be right it's like you know the weight the weight on money is just like 0.99 that's the entire picture you know it's exactly yeah did you have any did you have anything pop to your mind? I didn't have anything that immediately popped to my mind I I I'll have to think about it a little bit more. I mean it certainly has happened like I we we'll get to some of the stuff some people asked about like you know the closest we've been to night capital and whatnot. Yeah I I I in those cases I know I was doing something wrong so like fair enough I don't know if I have ambiguous ones I'd have to think about a little bit more it just popped into my head with this question. So I'll ask you Mr. Fox's next question though.

SPEAKER_01 26:29

So this one was when posting on both sides of the market how do you ensure that you're not overexposed or avoid taking a position the first thing that popped in my mind on this was what uh like you gotta you kinda you want to know like what the easy side is and the hard side is I don't like it's that's a very um colloquial way of saying it but it's like you'll be able to tell like oh you can get one side kind of easily um and the other side might be a little bit harder to get so how I try and make sure I don't get overexposed and it's not always possible because sometimes like you have everybody's betting the yes. So like no matter what you're not gonna be able to get the yes. So okay but you know let's say like it's more of a money line or more of a I don't know you know something where you could feasibly get both sides. You want to be up um you want to just be up on the side that is harder all the time and then kind of like breaking your orders on the easy side into smaller uh snippets I guess is how I would say it. So like just broadly what you want is you're just thinking like well if I get this like no problem because this this is how I would think it's like well so a good example would be like let's say let's say uh let's say that Cam Young and and Scotty Shuffler were like going into the weekend at this week's PGA championship and they were like they each had like 30% win probability and I was like okay I'm happy to sell as much Cam Young no as I can because I'll be able to get Scotty no but I would not start by like blasting off into space on Scotty no because it's going to be and Cam Young is a popular golfer so that's probably like sub him with like Brian Harmon. I don't know why I'm picking on him today but Brian Harman. So it's just like I know I'm gonna get Scotty no or Rory no in that spot.

SPEAKER_03 28:42

So like I want to be a little more careful um there and then just be willing to take as much of the other guy as as possible knowing I can kind of get out of it whenever I want yeah I've never heard that that term the easy side or the hard side or whatever you said but it's uh I think that's that's a totally fair way to put it in in my experience too because when I was thinking about this question what I what I had thought was like it's it's sort of impossible to avoid being overexposed on some markets like it's just really hard to get in the current state and probably always like this is probably just me learning like what the sports books deal sort of like deal with but like it's just really hard to get action on the other side like on certain things that you're betting like it you know Scotty Scheffler like I don't know what price I would have had to put up to get the you know the Scotty Scheffler um yes birdie or whatever you know like the opposite of what I like it would not have been a good I don't know if there was a price like I don't think there legitimately was a price I mean you compound it with some of like how the the apps do it like I I don't know you know Robinhood is like I guess much less of a percentage of Calci's volume and I know they're like plugged into other places now too but like for a while they're only like basically all the markets were like routing through the nose right so like in general it's just like your nose get filled way more at least mine do. Um so it it's just sometimes really hard. I think that's where like you you this sort of relates to another question um from Hydra Dom. His question was what quantifiable ways are there to think about making a negative EV trade to reduce variance say I could pay 5k in EV to realize and 100k in PL um and then you don't have um swings or whatever. So like there is like there's like pretty simple math uh I had jotted down an example but I don't think we need to go through it on the pod is of like the idea of like there's a big benefit if you like think one side is like plus E V to still depending on like the amount of volume and everything to still write bets on the other side. It effectively makes like your I think Rufus talked about this when he was he was on our podcast. So um if you want to go back and listen to that but like the idea is it gets you a better effective price on the good side you know if you like write the right amount of volume and you can do way more volume. So like I think like one of the the the heuristics that people need to lose with prediction markets is like it's I think in general people didn't like don't like the hedge or like take negative EV sides or whatever from sports fix when like the whole then it was it was very costly to get out of things. I think that's not not true. And I think there's like a you know there's a big benefit to getting both sides. It just can get your effective price better. So like I would love in like the Scotty example I guess coming back to that to like get the other side and be not not balanced right because I think one side is good but like get both sides. But I think the reality is that's where you need to just sort of use your your max limits and stuff and just say like this is how much I'm willing to take on this thing. There's no way I'm gonna get enough action on the other side and so I just need to sort of like cut it at a certain point depending on your markets and risk tolerances because there's certain markets like I don't know what like yeah unless you start like buying like crossing the order book like you can't get filled. Are you allowed you're allowed to do that no I mean I do I do do it you know I I I think you have to do it sometimes. There's there's certain spots where I do think it makes sense. Like if if if the if the if there's like an infinite amount of flow on something then it it does make sense occasionally right because you can you can get into those effective good prices um but it's there's got to be like infinite flow on one and so basically you're buying and then you know you can yeah fill out a better price on you know behind them.

SPEAKER_01 32:54

Right. Yeah the it's the so there's like because the the the hydra question I actually kind of Jeff Benson had a two parter one of which was adverse selection but the other was the bridge jumper. And I feel like Hydra's question and Jeff's bridge jumper question are kind of the same question you know like if you have this big bridge jumper what do you do you know I think Jeff was like what was your uh examples of some of your biggest bridge jumpers like all all of my biggest bridge jumps are either just stuff that we bet directionally um before and couldn't really hedge out of uh or kind of did or golf no's but it kind there's this example from this past weekend which I think touches on all three of these which is we had a big Cam Young no position. Uh if you weren't plugged into the truest championship SP which I know you were but the for the people who weren't uh Cam Young and Alex Fitzpatrick kind of came in and then Chris Wrighton who we actually we were long and we had all this Cam Young know and we were just like if Cam Young won it would have been probably like our biggest loss ever. So what we did in that spot was we just went out and aggressively sold minus what we thought were even minus EV spots um passively on you know basically every every golfer in contention snow at that point because we also knew like hey we'd love to trade Cam Young live but like we will not be able to like it would be insane to start taking more live at the current number so like we were willing to oversell like Alex Fitzpatrick who was um slightly less popular than young so like we would kind of wanted to swing it that way knowing like if if we could get enough fits no and some other people no we could turn young back back on which would be helpful um so it's just kind of like yeah it it is you know it's there's so much more to it it's very interesting like risk is and how you yeah I don't I don't know if that was you know we did the optimal thing there but like I think it's just become so much more of a thought part of our thought process now than it than it used to be when we're like all right we're like all in on Steph Curry and Clay Thompson against Mahomes and Kelsey like no way to fucking hedge this so let's watch it and cry.

SPEAKER_03 35:42

Well there's there's also just so much more like liquidity like in these these markets there's just tons of volume. So I mean I I've had similar experiences and I think it's it's like a really really interesting problem that markets like like a golf to win or any of these markets where there's like many um winners and like it you know that the the amounts net and all this stuff like I think they're really fascinating because yeah I think every time I've participated in one of those effectively what happens is you know I'll be writing bets on everybody and then I'll get to a point where I'm like I have probably too much like I really do not want this person to win now. And so then I'll like you know you turn off the spigot for them and try and get everybody else caught up and you're like okay now if you if that person won it's not so bad. And then you you know you turn it back on and then immediately you're like damn it. Right. Because usually you have like an opinion on that person. So that that's why like that phenomenon would happen. But yeah it's it's it's it's really interesting and and not easy and you know it's a game like like you said like I think with all of this like you don't want to make big mistakes so like or have something that's like a huge huge negative. So like because there's very few fees or like the cost is low relative to like sports books and whatnot like you can be aggressive quoting those no's on other people and you're not actually paying that much and you're reducing your risk like a lot. And so that's that's like the benefit um with all of this.

SPEAKER_01 37:17

So um I think that covered yeah like the because so the interesting part of that was like we were long the guy who won the tournament but in the middle of the round or whatever once he started to to once like Cam Young dropped away basically in the beginning we then started like buying a lot of other people besides this guy because we tried to sell him the day before and we couldn't sell this guy because like you know he's he's just like a he's a no name he or he was a no name before then so we just started buying like everyone we could like while that tournament was going on. So like we didn't win as much as like we would have won on him pre-match but by the time it was like the 16th hole like it didn't matter who won basically and like that's the other thing is like sometimes I'm like oh I don't want to like you know dilute that winning ticket or whatever you know just like these classic traps but like that's the flip side it's like not even as much it doesn't have to be like I'm just protecting my worst case scenario which was Cam Young but it's also like I'm just trying to maximize my bankroll growth like regardless of what's going on like whether it's bad situation with Cam Young or it's good situation with Wright and like it it doesn't matter I'm still doing the same thing.

SPEAKER_03 38:45

It's just for you know different sides of the line right I think at you know whether you stand to I it's all proportional to your bankroll I mean this is like the whole idea with Kelly and like but like if you are going to lose a ton of money or you are going to gain a ton of money like in general like I it doesn't even have to be a ton of money. I obviously like Kelly would tell you to accept your EV basically like at any time like don't don't add variance for no reason right um I think there's like just practical aspects about that where it's obviously more important the more the more money it is in either direction. But yeah no it works you're right it works it's the idea is the same both ways and people probably have an avert I mean I think the human element of it is to like I don't want to lose$300,000 you know and I'm gonna fix this problem more than you know like I could win three uh like I'm gonna let this ride that's just like human nature or something. Right.

SPEAKER_01 39:45

Um but you didn't really take much of a kick in the ass to like try and get less risk on Cam Young but like it did require a little training to like also make sure you're you're doing the right thing in the other direction too absolutely so let's let's go to Mr.

SPEAKER_03 40:06

Nobody's question um we have a couple more and then we'll go to the combo slash parlay questions we got so for Mr. Nobody when are you when you are receiving action that's clearly sharp what do you do with it are you using it as a signal to move lines are you using it to bet it out maybe both the size and speed dictate this decision. So for me like I'm actually pretty this is going to be my answer to several of these questions from this part for like there's a bunch of things I would like to do better. This is certainly like in the realm of them in general like my broad strategy on the prediction markets is like not to be doing anything incredibly smart or sophisticated or intense. It's just like not to be doing stuff stupid things. And so like I don't want to get in the like I'm not yet at the point where like I'm trying to get like really sophisticated with um you know action I'm taking and doing anything more than that with that than just saying this might be bad. I should just get out of here for right now. Like I don't you know if if if something is like up or sus, I'll just you know observe and maybe like decrease size, try and figure out like what's going on over the long term. But I'm not trying to like I'm just not sophisticated enough yet with with this stuff that I would obviously like to be. And I think like people who are doing this stuff could probably do really well because my guess is I mean this is these are hard problems to solve and do them well. So if you do do them well I think you would do very well but um no for me like I'm not doing a ton with this. I'm just trying to get in front of like the the recreational betters and just stay there and not do you know that's that's my goal on the prediction that's the game.

SPEAKER_01 41:55

Yeah. Yeah I I agree I have like so one thing I would that I think is a little different is like do you have a model or no? If you have a model and you get what you think is like a sharp bet I think it's pretty obvious what you do with that which is like think about it be like oh why would they bet that you know does you know what kind of factors would go into them being higher lower on that team or person than my model and then you know write it down and next time you're making tweaks or you know running some some tests like you know consider it. If you don't have a model then like it's not there you know whatever. The thing I would do if I didn't have a model and I had the outs though is like I would certainly like figure out some betting out strategy. Like if if I was like a top down uh top down guy and I had a lot of outs like outside of prediction markets I would be betting I would figure out and like get into the practice of like betting some stuff out because I think that would be quite profitable from what I've seen as far as like big um betters and their ROIs like as far as like being on the other side of them.

SPEAKER_03 43:24

That makes sense. I think the next question was was related I'm curious what you have for this one.

SPEAKER_01 43:28

So it's from constant do you have some sort of auto mover feature where if you take a click over X dollars or contracts on a certain market you slide your price or bid yes kind of um or yes but it's it's it's a weird so it's funny like you're just like oh just do an auto mover but it's like what the hell is an like how actually do you make one? And it is actually really complicated. Um I don't know.

SPEAKER_03 43:57

No for sure. I think that that's that's what I was saying about like

SPEAKER_01 44:00

the last question this question I think you know if you do them well they would be extremely valuable I mean but but they're not easy it's not just like oh yeah just like just move on I mean I you know the I like the joke of you know the you know just take a bet and move a number like it's not that simple like I wish it was that simple but the people who distill it down to that it's not that simple you know yeah uh I'm not gonna say like exactly what we do but I I think like to be helpful what I'll say is you want your quoting logic to be aware of your position um and then from there you can kind of figure out what to do with it uh but yes kind yeah and then like it m obviously it depends like do you have a is this something where you feel really confident or you feel not confident are you going based on your own number or off a market number these things will go into it but like you want your sizing and pricing not pricing as in like what prices you're quoting not like generating your pricing to be aware of what your current position is and you can use that to adjust your price or your size.

SPEAKER_03 45:23

Like I think sometimes people are like oh I'll just adjust my size size down but you could also use it to adjust your price a little bit and it has the same impact as or it has the same like directional impact as a what you would think of as an auto move here you know take a bet move a number it makes total sense to me and I think it's aligned with like you know the managing risk part of it is none of these decisions should be made like independently right like you shouldn't just just write infinite at a certain price that's probably like not optimal. Because I think like the simpler way that I would think about it that like I guess I have some of this I I wouldn't consider this an auto mover but like the the bare bones of it would be like understanding like the order book of like where you're at and like the flow and move not necessarily even moving based on bets you receive but like where you want to be in the order book should vary depending on like what the order book at any given time looks like and like how much action is actually coming in. So like this is just basic stuff of like you know if if a market is 10 cents wide and there's you know 10 shares at at the top level at each one like do you want to jump that or not? Is it different if there's 2000 shares at each side like just basic basic stuff like that that's not an auto mover but just like broadly knowing where in the queue you want to be like maybe a queue mover is the way to talk about it.

SPEAKER_01 46:59

Being Q aware is qu is important too very important.

SPEAKER_03 47:02

Yes yes all right let's go to let's do let's do all the combos slash parlay questions.

SPEAKER_01 47:09

Okay.

SPEAKER_03 47:10

Um not sure how much you are in the the combo streets these days. We're in there. We're in there you're in there okay all right so you could probably give i I'm much less in there but first one for from Troy if you I think they're really like basically from Troy and Bunchu I would say is basically effectively the same question.

SPEAKER_01 47:32

Yeah it's more or less when you're booking parlays you know your liability isn't just like one side it's many things they're interrelated it's not clear like how to actually like measure your risk and how how how should you think about that yeah so I actually wrote down uh what Giovanni said basically what he said in the response I think was to Buncher's question was like the math problem becomes very difficult and it just becomes vibes. Now like I do think that doing anything RFQ wise vibes becomes hard unless you're like a unless you have like a really good UI. I feel like maybe Giovanni does because he built uh he built hot streak by himself I think like he built the at least the initial product by himself so he might have some like really good UI he can just kind of like click around and and be vibes based on it. But with RFQs like it's a lot like it's kind of happening faster than you can just like move your order in the order book or like it's like almost happening so fast like and so many things like there's no vibes. You don't even know what's going on so you can't have a vibe. Um which is why when it becomes difficult. So like I think right now we're like very under this is like like like SP said like there's so many things that that you can do and this is one of them where we want to improve um but a lot of it is a lot of what we want to know is like risk based on not just one leg but like specific combos of legs like popular um sets of legs kind of and then also like popular combos. So one thing that you find out is you're gonna get a lot of like moneyline favorite parlays if you do pre-game like moneyline combos you're just gonna get you know depending on the day you could only have three NBA games so like maybe that day you're just like yeah I'm gonna quote all this different stuff and it's like oh it turns out like half of my stuff was contingent on like the Spurs and the you know OKC like losing and they both won. So now I'm broke you know so I think just like trying to figure out um what are your popular combos that you're exposed to um and popular legs kind of but I think like where I'd like to go and I think where these questions are kind of implying is like offsetting risk. So for example like there's a lot of combos where if you win you like let's say you have this big portfolio of combos and one leg settles like let's say uh I mean I know ball so I know the Spurs are playing the Timberwolves in the playoffs. So let's say the Timberwolves win right so basically what happens is like if the Timberwolves win you know a lot of comp you know some combos are like alive and some are dead. So there's like a big section of your portfolio that like both can't win. Now the problem is it goes way beyond just the Timberwolves and the Spurs and it starts to become like this really complicated like you know 12 dimension like Rubik's cube but like there's probably some middle ground where you're can like estimate some kind of like total like take a guess at some kind of like 98th percentile like loss exposure to certain you know I don't know to to what could happen in MBA that day or you can narrow it down to just like the money you know the money line combos or whatnot. But basically what you want to do is figure out some kind of way to use um these offsetting combos and legs to start to be able to book more and more and more um while taking less risk. And that's really the benefit is like can I now you know how can I structure this in a way where I can start to write more SGPs but also not increase my risk is is the real like that's the reward for figuring this problem out. It's not as much as like you don't blow up like yeah it that will also help but I think like there's a big offensive value for solving that problem too which is you know and we and we haven't solved it or like sorry to solve it. It's just just FYI but that's how I think about it.

SPEAKER_03 52:29

Yeah I mean like a lot of this we talked about I think this is just a fascinating problem. I mean I think some of the basic things that that I would think about would be like and yeah you touched on it all like a the risk per leg is one thing but that's probably simple and I I think the next next thing would be like pairwise and you could go to however many dimensions like I think it depends a lot on like what type of parlays um people are predominantly writing like if it's predominantly you know smaller like maybe that's enough. If it's bigger maybe you need to expand that out in more dimensions um but like you could you know you could take this to like infinitely complex where you know basically you have like a live real time sim of like I was gonna say it's almost like a it's almost like a DFS sim like it's actually very similar to PIC six. PIC6 sim yeah it's actually very very similar like a problem of like you sim all the outcome like if you simmed all the outcomes like at all the the difference is like with like you would want if you if I were to do this and build this I would want it real time. So basically like real time I have like you know my my net basically like my net position or like EV of each leg and I would be like okay if this because yes like combo like the whole combo needs to hit but you can sort of like do an inferred EV of each leg basically as like a portion of that live combo. And so you could you know be like this is a EV loss of X if this leg wins am I okay with that or should I like hedge out of this? And if it was like real time, you know let's say it's four NBA games through the day and it's all favorites like what would happen is that EV of like that last leg would would get really high by the end of the day if the first three favorites won and and you would have that sort of like view throughout the game throughout the games earlier in the day and then as you move into night and maybe that's a case like we talked about where um you know like where you don't want to lose a ton of money so you hedge out at a relatively low cost. So I mean like that's that's the way I would think about it it's obviously like the other stuff like not just like a just Claude build me you know like uh because I think this is honestly like a problem sportsbooks seem like when I've heard people who worked at sportsbooks like they've never had really good ways to to view their parlay risk. I think it's a solvable problem though.

SPEAKER_01 55:07

Like I was going to ask you do you think like this will be built within a year? I I would be surprised if someone doesn't have it.

SPEAKER_03 55:14

Like I I know like like in real time I've never built it and I I've heard interviews with people who've worked at sportsbooks who've said things like this is not a solvable like effectively that I mean I could be dead wrong you know this is this is a guy on his couch like pointing at the athletes on his TV being like hey I could do I could do better. Never done it I don't think this is uh I don't think this is an unsolvable problem I I you know I you know especially with something like like on Calci I mean it gets it gets complicated right like with correlations and stuff but like let's just let's do a simple example like like let's let's do an uncorrelated example of like money times or whatever. You would have the prices of everything yeah at all times right like it's not a hard sim right you know it's a hard sim when you you know have the correlations and in-game and all that stuff and I get that that part um and you need like pricing engines for that stuff but um I think you could you could build like a version of this not yeah I was gonna say I guess it it depends on like what you call like a ver like what you call an acceptable version of this because it could be one where it's like well I need to know like in the middle of a game like how likely it is for like this team to go over and then that means like this guy would go under on his prop or whatever you know like that's comp yeah yeah yeah no it can it could be infinitely complicated. But if we think about this as like a risk like good enough tool I I don't think it needs to be that it needs to be like because it the other thing I thought about when thinking about these these parlay stuff is like and this is honestly how I've thought about most of like my risk parameters that I have in place. It's like you have a really bad day and you're like okay that was probably too bad of a day let's not do that again. What do I need to change to make sure that doesn't happen again and that's like you know like if I was doing if I was doing combos like that's basically what I would do is I would guess what I think my parameters should be in terms of like per leg exposure um per combo exposure like maybe two three however many like to say I I want this much on this type of combination and this much on per leg. And you'd probably be pretty aggressive on that or at least I would be and then something like that would happen and I would look at it and be like that was probably too much and then I dial it back to get it like how I want it. And it's like an ever-evolving process.

SPEAKER_01 57:40

I think that basically just works um should we go into the night capital question? Yes we can do this yeah so night capital basically was there's like a flash crash in the stock market which basically was a bug in this company or this firm night capital's code where their automated trading system just basically liquidated their entire uh portfolio or their entire uh bankroll as it's under management whatever we want to call it in the traditional world but uh I think the the uh point of these questions is like how do you feel comfortable letting your automated trading system run without the fear that it's going to there's going to be some bug or some issue that's going to when you like go outside to get your mail like you come back in and all your money's gone. You know that's the gist of these questions.

SPEAKER_03 58:49

So when we say like night capital it's more like referring to that one unfortunate uh company but the theme the what they embody is this idea of like some automation risk yeah so we get we had you know I also lumped in uh like you said Benson's question here of best and worst time if you got adversely selected walk us through some of your biggest bridge jumper positions and how you manage them reason I did that is like my examples that I was going to talk about were like related here of the you know how to not get knights capital uh as pads put it and then you know also Benson's question and and uh so honestly like I don't have a great answer to this like I I honestly agree with the original question of like is the only way to avoid this to the surefire only way to avoid this is to keep your account balance low. I sort of actually agree that that like if you if you want the percent the 100% like this is never going to happen like yeah that's that's probably the only way so I think it's just we're trying to get it to as close to 100% as possible. For me it's it's been a work in progress of getting like things breaking you know not in an absolutely catastrophic way but in a way that is bad but fixable and just keep layering on more and more I guess like security measures or checks or like failsafes or all of this stuff. And it's you know it's it's amazing that uh you know I'm even up on like the prediction markets because I when I was thinking of these questions like I was thinking about how many things have gone wrong some really bad some less bad but like how many issues I've had um because I'm like not I'm sure you're far more careful with more people of like has this been reviewed should the you know you you're also dealing with way more you know volume and stuff so it makes sense but I've just sort of like you know ship it and then issue pops up. But um I think for yeah I guess to give a short answer and then I could I could talk about my example after you give you a chance to answer the question is like you just you just want as many um like anything like an airplane right like how what why are airplanes generally safe is there's a lot of checks right before they take off. So I think that's like not you know the sexiest answer or whatever, but I think that's the reality of it is just have as many fail safes, code stops, everything gets pulled down if this happens like as like max limits and then like things on top of that are like overarching like shut it down if this is happening. Like all that stuff is what you want. And I think you know for me I've just kept building that over time as things have broken and things I don't want to happen have happened. But um there's no good I don't have a great answer to this.

SPEAKER_01 1:01:35

Yeah yeah I mean so I I wrote down some what I think are like the key steps. What okay so these are what I I think are kind of how you should go about this. So don't be afraid of what I call it or what we would call like dry runs. So like have instead of like sending the order have it like have there be a toggle where like we have for example like in a lot of our stuff we have a tag we include in the command line that's send order. So like if we don't include that what it will do is it'll say what it would send. So it does it runs through the whole process but it'll just like say this is what I would do. So that's a good way to kind of just like audit things. But past that like what you need to be doing is watching and stress testing. So like you want to make sure that any like max position stuff works. So like try and break it. So that could be like set your max position to like two contracts and see what happens you know you know make sure that everything's like it it stops posting once like you sell two contracts and then go from there. That's important. The way that you can kind of organically do that is just to like sit there and watch the stuff which that was going to be kind of my question to you is because we'll usually have people one person like watching everything just in case like stuff starts to go crazy. But we also have overnight where like we don't have anyone watching. So but we didn't do overnight for a while. So that's kind of the the the thing is like you want to watch something and just like feel like you've seen some outliers come up and like see what what could be a problem. Make sure like okay it's always you know acting the right way when you know some risk setting is breached. Like you want to watch it like successfully react to these things right um so watching and gradually kind of building up to the point where you're gonna let it run is quite important. But like I think the number one thing is what SP said is don't have a ton of money in the account. Sub accounts are now there on call sheet that's a good use case for those is to get some sub accounts if you want to like test an automated strategy and put a little bit of money in there and then you know see you can leave it overnight. But yeah I mean the things like that you don't want to be doing is like flipping the buy and the sell. Like there's some expensiveness there like the reason that this is it's serious is that like if you're trying to sell 99 but you actually like buy 99 that's effectively that's it. It's over yeah like that's it like right there that that that's all she wrote so like this is serious and and you do really want to be be careful.

SPEAKER_03 1:05:04

Um so yeah no I think the watching it was a great point like I think what I try and do now is if I'm gonna make a change you know I I do it in a time where I can be like generally on my computer and on my phone. Like I'm not gonna make a change and go to bed. I'm not gonna make a change I've learned the hard way don't make a change and then go like at a work conference you know for the weekend and then you know amen Thompson and Austr Thompson are like you know mixed up or whatever. So I've learned that just as a random example yeah yeah uh I'll give I'll give a different example because that was the one I gave on on Chris and Henry stroke. But um the other thing is like I've learned is you know Cal she's making updates like every week and I don't know that impacted you but like I woke up you know and the you know because one of Pads's question closest encounter being night capital it was it wasn't this but like one day I woke up and like everything was broken. All my max limit stuff was just like Not working and it was because Kashi just like changed the API. I don't exactly know what they did, but they changed something. And I had like way more shares on certain things than I would have wanted. Um so that's another thing I've learned is like maybe shut it down on Wednesday night or whatever they they do it, um, or at least like be mindful of that going on if you're not gonna shut it down. Um I guess I can I'll give my stories, and I think these are these are sort of you know Benson's question and Pads' question. So I I had two stories. Um one early on, uh I've really only been doing the the prediction markets, I'd say seriously, like this this year for the most part. I I sort of dabbled like late last year. And so one of the, you know, I was doing I was doing some stuff for the Super Bowl, some of my first automated stuff, because up to that point it was mostly manual. And um I was like, I wasn't paying attention. And next thing I know, I had like I don't know the exact number, a lot of shares on I think it was like Patriots, one of the derivatives. So it's like Patriots first half or something, like a lot on it. And I was looking at like what was going on, and you know, I learned the importance of you know, uh basically like don't cross the order back, like don't buy, like only post as a uh as a make. Um so that was a that was an expensive lesson. I mean, at the end of the day, that market was trading very, very thin. So like it wasn't the end of the world in terms of like EV, but I I bought like a ton, and obviously the Patriots didn't do well. So um, in terms of like I did, I was able to get out of that, like in relation to Benson's question, like what I did. It wasn't a bridge jumper, but like in that case, not that bad because you can actually get out of it at a pretty cheapish price. Like buying something that's really thin, you can basically just get out with the fees and the the very small spread. So it's it's not that big of a mistake. But that you know, it could have been bad, like in a different situation for sure. Um and then the other one, which which would, I guess, would be the closest for me, is it was a certain market, and I think I've told you this story, certain market where it was something where more than one person could win. Uh, I won't go into the specifics, but it was you know, a market like golf to win, or sorry, it was a it was it would be like a market like golf top 10 or something, um, where like more than one person could win. And uh basically I had a bug that that was pricing all the no's like like only one person could win. So, you know, if it's like top 10, you know, there's gonna be 10 winners there. And you know, the prices are gonna reflect that on the no. If if the only if you think only one person can win, the no prices are gonna be like really aggressive, right? They're gonna be like 90% for like everybody, you know, they're gonna be very high, depending, you know, like what market we're talking about. So that was really bad. I think I woke up and you know, like had it was never a good feeling when you wake up and you know, yeah, like your cash is like zero and you're getting like infinite alerts that like you're out of collateral or whatever. I'm like, yeah, wow, people must have really wanted to bet these things. So I mean, honestly, I just got I tried to get out as much as I I could in that. Um the prices were obviously like horrible that I took. So that was not like the um not like the the Patriot situation. You try and get out as much as you can. Just uh that's where one of those cases where you just sort of like eat the EV loss as much as you can and like live to fight another day. Um probably honestly ran fairly good to like not have that be worse than it could have been. But um yeah, I mean that that's that's why I I laugh. Like, you know, I've had you know, that was probably the most extreme one, but like I have issues like this all the time.

SPEAKER_01 1:09:52

So yeah, that that's a good honestly, that's like a really good ex example. Because I think like there's so many different ways, sadly, that you could be like quote unquote night capital. Like it's not just there's not one way, like this could this could happen in any any different type of way. Um and I actually the other two things I wrote down were no taking and ramp up reload speed. So like no taking, like you said, like taking, I I don't think you should that's not like a rule forever, like that's not like absolutely in stone, but just know like taking is way more dangerous than than making. Um from an automated standpoint, and then the reload speed. I want to get back onto that because it's like how fast your reload speed is could is gonna make a big difference on like because let's say you have a bad price, right? Um, but your reload speed is super slow. Well, how bad could it be? Like, you know, you'll probably find out about that by reload, I mean like you get taken and then you post your order back. The slower your reload speed is, the less times you get punched in the face before you realize it, you know. So that's another thing is like if you're kind of building into this, you know, low small size, slow reload speed, always watching, no taking, and then just kind of from there, you know, build up to it. Maybe you want to lower your your reload speed overnight, you know, or or whatever it is. Like you only want to reload every two hours overnight, you know, just uh to be a little safer. And these are all levers that that you can pull.

SPEAKER_03 1:11:45

Yeah, yeah, no, it did it makes me laugh because I I think my I I can't remember exactly, but I know my my the reload speed was slower when like that amen Austar Thompson thing happened, and that was overnight. And so, you know, to some extent, obviously bad bad situation was angry about it, but I did get a little chuckle out of it, thinking like somebody probably stayed up all night, yes, just stared at Calci and waited like every 15 minutes and it's like more free money, and but but I did make them stay up all night, you know, they didn't get an ounce of sleep that night.

SPEAKER_00 1:12:19

Um so who really won?

SPEAKER_03 1:12:21

Who who won in the long run? You know, who's decided? We could do we could do these were like the uncategorized um questions. First one from Viking Betts. Um, Cauchi's UI isn't so hot for understanding your risk super easily. Been working on my own dashboard to handle this. What kind of metrics, views, tools are must-haves for a dashboard, uh making decisions, whole portfolio. So I think we we talked a lot about this already, like in the just the way we view the risk. But for me, it would be like, and I I basically built my own. I agree with you. Like, you can't see anything on Calci well. So like I built my own thing. It's not extensive at all. I think I'd probably built it in under an hour. Um, but broadly, like what I want to see, and I could improve it, is like how much exposure to do I have to a player, a team, what direction is it? How much of this cancels out? Like, what are like the weak spots? Because you could imagine, like you could set yourself up for like, you know, Polish middles or something where it's like disastrous if a certain number lands. Um, so just like trying to understand total risk, and like I for me, it's always like how much pain can I take today? How much pain do I want to take today? And like, how how how can I make sure I don't get to that level? And so those are like, you know, I could improve upon it. I'm sure you you have a more advanced version, but like for me, those are the basics. That's basically it.

SPEAKER_01 1:13:50

I mean, from a like a standpoint of like a golf market where there's you know, where you're netting positions or whatnot, you want to know you want to know like let's say, like if so and so wins, like what does that do for your portfolio? Yeah, do you make or lose money? Because let's say you have you have like uh you have like 10 grand 10,000 contracts of Tommy Fleetwood know, but the rest of your portfolio is like 50,000 contracts of like all the other people. So like Tommy Fleetwood know, you're like, oh, I'm 10,000 exposed to Tommy Fleetwood, but actually you win a lot of money if Tommy Fleetwood wins, even though you do lose his no contract. So we have like each player, it's like what's our actual exposure? Some will be positive, some will be negative, and then what goes on the back of that is like what's your max loss? Like what's your worst case scenario? Like, which player is your worst case, and how much would you actually lose, right? Um yeah, and then I think what S what SP said, you know, is is is good for like the broad sports markets. Um, but that was just like one thing with the netting markets that I think is should be touched on.

SPEAKER_03 1:15:08

So I asked you this one from Benjamin Chern. In tournament poker, people sometimes shove early for a chance to double, making a deep run easier. In sports, this would look like betting above Kelly until the bank rolls a certain size to justify quitting um and dedicating more time to betting. Assuming you have an edge, what's your thoughts on being aggressive and risking your bankroll early?

SPEAKER_01 1:15:29

Um, yeah. So I I also I'll say like that's not like good poker. Like that's not plus E V, but like if you're like I guess looking to maximize your fun, you could you're like, look, I either want to like have a stack and like you know, have a shot at a final table or to leave the casino. I guess that could be the way to to do that. Um I think it's an interesting question. It kind of touches on Flupp's interviews where he said like he would just he had a good job and he went broke like a decent amount of time, like quote unquote broke, like he had a certain number um of he had a certain like you know bankroll set aside and he lost it a certain number of times. And then eventually like it got to a big enough size where he could um leave his job or scale or you know it doesn't, you know it but it is an interesting question because there's certainly like key numbers, like not like there I don't know what the but like there's like there's a certain point where like having a a bigger bank role like is an edge in itself in terms of like you can buy more tools or subscriptions and you can uh pay you know people to help you, or like on prediction markets, just like having money sometimes is valuable because you can like post up money when there's no, you know, there's a lot of collateral requirements or whatnot. So I think like there is some truth to this where like I don't know, I'm always hesitant to be like, yeah, just like let it rip early, but like I think that that is true. Like the younger you are and the more other options you have to make money, like you could be and like I like SP always says this it's like what is your actual bankroll? Like your bankroll might not actually be like the$6,000 you have in your betting account if you have like a$200k a year job, you know, like you're saying$600 or sorry, or$6k is your bankroll, but like you actually like have this job plus your future earnings and all of this stuff, and it's actually a more complicated question. So, like the long story short is like, yeah, there's some validity to it. Like, I don't think I think people who listen to this podcast are probably not gonna go nuts and like overdo it, but yeah, I don't know.

SPEAKER_03 1:18:06

Yeah, no, I mean I think you hit on some of what I would say about like the bankroll stuff. Um, I think the other part is like it depends what you're like, I agree with you in terms of like EV, but it depends like what you are optimizing for. So like if you the just an extreme example, if you say I'm I'm just never gonna be happy unless I'm worth a hundred million dollars, like you should make different life decisions than just trying to optimize EV every step of the way, right? Like I don't think you know, someone who said that I would be skeptical, they would actually be happy when they had a hundred million dollars. So they probably have other things to work on, but like I think it is reasonable to not optimize for like median outcome. And like, yeah, you know, I think your personality could could warrant that. So I think it's like what what you want, and I do think people probably like aggressively under underestimate their bankroll when they're young because they have their whole life to work, and in my like if they're working and they're willing to work, that's like part of the equation, right?

SPEAKER_01 1:19:18

So all right, we got uh Jack. How do you Jack Heavy? How do you think about making for events that are not settled that day? Um, he mentions pricing outrights and round matchups. Is there an X RI that you say this is not worth tying up capital for the weekend compared to what I expect to make on a round market? Uh well my my take on it is like I try as hard as I can to never do anything that settles a day later unless it's a capital efficient market like outright, which means like if I I can so the difference between like a top 10 and an outright is each dollar I book on a top 10 is not gonna I cannot use until the tournament's over. But on an outright, if I like book Cam Young, then I book Scotty, then I book Rory, like dollars start coming back and I can use those for other things. So like I don't do any we don't do any top five, top ten, top twenty anymore. It's just not worth it from a capital allocation standpoint. Um and yeah, I'm very sensitive to this. Like this is I think like making sure you're using your capital optimally when you uh like we're we're not jump trading, we don't just have billions of dollars. Like, like we have our bankroll and we can turn it over. So if you're in a situation when you can turn your bankroll over, it's really important that you you think like Jack, like this question about Jack is like one of the key questions. Uh when you have a bankroll you can turn over that you always need to be thinking about. And like do not if you have a really good good spots that can settle in a day, like those are worth so much, so much more than the stuff that settles four or five days later.

SPEAKER_03 1:21:17

It's funny how much, at least for me, it's changed, like in the way you've answered that question. Because I think like I used to like sort of roll my eyes at the people who like would would flame people for putting money in futures or whatever, like in the online sportsbook world, because I was in the online sportsbook world, I thought it, you know, my my impression is it was difficult to play like your entire bank role on a given day. And it's funny that you know, hearing you basically say one day is too, you know, more than one day is too long now, you know, because you can you can deploy the whole thing like in it every single day, basically.

SPEAKER_01 1:21:56

Right, right. And and imagine like booking a future, like a market that's like a market that's settled, and that's the thing about PMs is like they have all these markets that are like settling a year from now. I do not understand who's posting on those. I cannot imagine a situation where that's a useful use of your money.

SPEAKER_03 1:22:19

Yeah, yeah. I mean, it's I think those are mostly like not I mean it's it's interesting on the sports ones. I mean, a lot of those are non-sports type things.

SPEAKER_01 1:22:26

Right, that's what I'm kind of thinking.

SPEAKER_03 1:22:28

So like I I'm guessing the those people are just like have a harder time like in sports, it's one thing to get your entire bankroll through. It's is it would be much more difficult in something like if you're like a political trader or something, I would guess. Like that's just not reasonable. So I no, I mean, I think you hit on it. James asked a similar question, which was is it worth trying to capture super low um XR X ROI but high return on premium edges, contracts like half a cent but can sell for a cent. And yes, if these don't seem capital efficient due to you know the the collateralized positions. I think, yeah, this is all part of it. I mean, you you see it though, like the the stuff that's like really capital intensive is less competitive, like way less competitive than an equivalent edge at something that you need less money at. Because like, yeah, most people have a finite number, finite number of dollars and want to use it most effectively. So, I mean, I do think there are like it depends what you're doing and like how easy, like it's a skill to be able to like I want to emphasize that it's a skill to be able to play your entire bankroll in a okay way each day. Like I you someone listening should not just be like, okay, I'll gotta just bet it all. Like that, that is a skill. And so if you can do that, that is great. That's what you should optimize for. If you don't feel like you can do that, then some of these other things are, I think, viable because they're less competitive, right? Like you people who are taking it really seriously, like GP here, like you know, he doesn't want to do that, so that means they're less competitive.

SPEAKER_01 1:24:03

I should have a uh quick funny story on this, is of something like of how serious we are about capital, uh, like you know, return on capital and time. So we uh I basically like I was I was you know in uh Tiger not to play the Masters, um and we got him at a good price. He like, you know, this is still post-DUI, and then he literally announces he's not playing the Masters, and he like withdraws and like goes to another country, and it's at 99. And I eventually like, and they're not selling this market, and I realize they're not gonna settle it until you know, at least until like the first person hits a t-shot on the Masters, and like this is a time where during the Masters we need money. So I literally bought Tiger to play the Masters, knowing he was in a different country, and like you know, in a drug rehab facility for one cent because I needed that money back.

SPEAKER_03 1:25:10

That that's where we gotta get the you know, the Desi cent, you know, just that's right. You would have been you would you could have got out for you know for much less.

SPEAKER_01 1:25:18

Exactly, exactly, exactly. But I mean the flip side of that is like who's posting 99.9. Um I don't know.

SPEAKER_03 1:25:26

Yeah, I always wondered that like you you see like ridiculous, like um, you know, 99 cent clicks where like you know, someone misbonded or something. Like I I've seen some examples of this, like in mentions or whatever. And it I for the longest time I was like, why? Like who would post that? But then you realize like not you, people like you, probably that that frequently, but like normal people, they just need their money out so they can bet on the next thing like immediately. Yeah, you know, so probably people do trade that, yeah, dude. Tiger, I lost that one.

SPEAKER_01 1:26:01

Tiger didn't fight.

SPEAKER_03 1:26:04

All right, last question, and then we'll hit the news. Um, would you manage risk exposure any differently in a market with liquidity rewards? Let's say a significant enough uh that that you are quoting in the market specifically to participate in the rewards program and would not be a maker in these markets without it.

SPEAKER_01 1:26:21

Absolutely, totally different, like could just night and day. Um I would design the whole strategy around the liquidity rewards program. Uh yeah, I like it it's just like such a such a firm yes from me, but it's just yeah, I mean I don't I honestly like don't even know how what else to say because like it's so different, like the whole setup changes, and basically what you should be trying to do then is how to get the most rewards without getting without taking on additional risk. And it changes the it changes your whole strategy around quoting, like you might not even be trying to get filled, for example. So yeah. Yes.

SPEAKER_03 1:27:19

Yeah, I think it has that was what I had jotted down. It depends like what the rewards are. I know different sites do like like liquidity rewards, and some do like actual, I don't know what they're called, like actually completed ordered rewards, or volume rewards or something. Yeah, so I think what you're optimizing for would obviously change the strategy. But like in general, you you're not optimizing for like making money on per trade in either of those things. Right. So then your risk, you know, strategy is different.

SPEAKER_01 1:27:50

No, and like that's one thing if you're doing like these liquidity rewards, and like poly US is obviously has has a lot of these out, is like you have to now. flip your brain into being like I'm okay to lose money on trading like lose a little bit of money and like it it'll feel like tough to do when like if you were on call sheet like all you're trying to do is you're making money trading like you're trying to make you know trying to make your spread or or whatever it is. That's a mindset shift I would say which which is is tricky because you're just like ah that motherfucker got me but like that's okay you know I'm not paying them like the liquidity rewards are paying that person so they actually got you know or whatever however you want to justify it.

SPEAKER_03 1:28:41

All right I think we made it through why don't we hit the news and do a couple of the uh the random questions we get and then we'll we'll call it a show.

SPEAKER_00 1:28:51

Yeah we're we're we're tight we knew this was going to be tight on time.

SPEAKER_01 1:28:55

That's all right just a different you know different uh format this week um okay so this is the big news I think or at least for us is FanDuel and DraftKings announced they're already profitably making markets on prediction markets in their respective earnings costs. Thoughts I mean uh these aren't sports books so they actually this should be banned. I don't know but I actually had a tweet saying like you know something along the lines of like you could you're feel free to like hop into the order books and then they were there and they're doing great. So I guess fuck me.

SPEAKER_03 1:29:31

Yeah I mean there's so many uh takes about this that made me laugh that you know like I I think people really think these companies are like very inept um and it's like they're just you know I'm not saying they're like perfect at anything or like standing for them or whatever but like this idea that like why can't they you know if they can do it here why can't they do it on our site or like why do they have to limit if they're not limiting on on Callachie or you know oh they won't we'll never compete they have to charge 10% margin like you realize they they just do that to make more money because they can just do that to make more money. Like do we all can we all just like realize that like it's not because they're these people are are inept or incapable or whatever. It's just it makes them more money their businesses and they're gonna do what makes them more money. That's the correct answer everybody yeah so I I mean it doesn't surprise me at all if like a you know Neanderthal like myself can can do okay on these sites like no duh these these companies are going to do well. You know I do think like I also saw some takes around like you know this means like they're they're just they're throwing in the towel and you know they're just I I think that's dead wrong my opinion on what they're probably doing here is just trying to like learn um and get their traders to learn a little bit about prediction markets use them get used to quoting them competing like just just get intel on their competitors basically for free not for free to they get paid to get intel on their competitors effectively um I think could be dead dead wrong here I think both these companies are gonna you know come to play this football season with production markets um and we're gonna it's gonna be like you know early days DFS with the ads or early days sports betting with the ads like they're gonna come to play and I know they're like sussing it out but I I don't think you know I heard some of what their leadership was talking about in both their earnings calls or whatever. Like I I'm quite confident they're gonna be ready to roll for football season with um legitimate products that and and there's like a step to to help them get there.

SPEAKER_01 1:31:54

This football season kind of feels feels like this watershed moment in prediction it's like the first like I don't know like last football season it was still you know oh is this legal is this not like kind of no it hadn't gotten any adaption now now this or adoption this is like like full throttle it's in the like everybody knows about these and now it's football season like just it does feel some like this is just gonna be one of the craziest times.

SPEAKER_03 1:32:25

Well FanBull and DraftKings were like scared no I mean not scared the right way but they were hesitant to do anything in this space. Sure. No because it was like it you know at this point it's sort of like existential probably to them to do something right like they can't continue to probably do nothing and just like I that's just like not really in probably either company's DNA either. So yeah I I think it's gonna be great for batteries.

SPEAKER_01 1:32:50

Yeah it's gonna be yeah it would be good but and I think like this is also like if you're gonna be a PM person and like seriously take the stance that an open order book is the right way to do this, which I believe then like of course FanDuel and DraftKings get to come in and compete in the order books on the exchanges like that that's what this is like it's an open market. So like uh and they're gonna be good. They're obviously I think what SP said is exactly right about you know they're just playing the game that they're playing the game in front of them and they'll play this game too and they'll play it well like uh I'm certainly not like yay they're in the order book like that's great. I'm gonna make some no like that's worse for me.

SPEAKER_03 1:33:43

That's like the most that would be like the most smooth brain take of all time. Oh nice we get you know like fan you know dragon duel I'm gonna start printing like that.

SPEAKER_00 1:33:53

Yeah I didn't see that specific take but I you know I hope I hope Shipper gives that one a retweet when it gets uh tweeted whatever you know that version of that take is yeah it's related to this yeah there was a yeah I saw a bunch of bad ones um but anyway I think like this is cool I think it shows I think what you said about like the existential threat to them is is real here because if I'm them I'm kind of looking around and I'm like oh no I'm in the room with these people like there I'm I'm trying to flip maybe flip you know like they're starting to like they don't want to hitch their wagon to like the AGA and you know the whoever's on on that side like they're like kind of probably looking around and being like we gotta get the fuck out of here you know um so this is good and the other thing with like being you know if you're trading on um like a true market like you want if you're if you're gonna have your own trading team trading on your your market or you know what whatever you you launch like you still need them plugged in with Call She and Polymarket and in all of this like whether it's through like price discovery or like the ability to hedge um or manage your risk like all the infrastructure that you're gonna use like will also want to be in um integrated with like poly and call she too so like like SP said this is just like something you build that you'll use later.

SPEAKER_03 1:35:30

Just when you do we don't have this on the news and I know we're already running long. I thought did you see that you know the comment for you know like why prediction markets should be legal. I don't remember if it was SIG or jump or someone but like the reason for they gave a reason why combos specifically or parlays or arkey should be legal and they gave two examples one was like a furniture example or a mattress snack like thing or whatever. Yeah but it was like if both the the men's and the women's team win because it was specifically for combos. So that was fine the other example was literally just sports betting. It was like this sports betting company needed to offload risk. So I mean it and there they are I mean it is it's against that on that is probably the most legitimate seriously like use case long term I I we've talked about this before like I don't know if any of these companies would ever actually want to do that. Potentially like I don't potentially like a smaller companies like I can't just can't see a world where someone like FanDuel or DraftKings it's in their best interest to do something like that. I think they'd be better off just like giving the promotion to like the players or something basically not just sending it to Calci or like someone else on Calchi but off topic. Let's go to the next one Wall Street Journal article about 67% of profit going to top 0.1% of users um you know what what was your what was your thoughts on this one?

SPEAKER_01 1:37:01

My my take is uh uh breaking news uh most successful people in an attractive competitive field yield majority of the rewards um we've never seen something like this happen before it's truly shocking yeah I mean the the yeah obvious that look with anybody who has any sense of what's going on obviously this isn't surprising yada yada like I you know all of it the article is like pretty I didn't actually even read it but um you know that would go against my ethos of an article without reading it but obviously not a surprise but uh the one thing I'll say on this is like I think the I don't know how much you would it's impossible to do like a b testing but like I don't think Calci can be mad about these articles when they like with the way they portray their products like I wish like it was it was literally laugh out loud funny that this article came out on a Monday and then the next day they aired like an ad.

SPEAKER_03 1:38:07

The ad. And it was like you know everybody has edge like you can't have both of these things like you know I respect it was a good tweet you had it was like like on a Monday on a Tonday and Tuesday like they clearly had this ad scheduled to run and they should like at least wait a week like just just give it a week like they you can't run that ad the day after this article and you all are saying like of course it's a financial market like wake up buttercup like and then the next day you're like we all have edge and like hand holding and singing kumbaya like and there's like no sports people on that or no there was there was there was uh there actually someone who is like a soccer and each sports I do yeah I don't I don't want to you know I I do like uh PM trader he was in it and he was the only one he was the one we know he said in his piece like the best part is it you know it keeps me plugged in or keeps people plugged in or something along those lines and I was like okay this this is going okay and then the next person was like anybody can have an edge or something along those lines and I'm just like oh my god so just don't don't do that anymore yes and maybe you'll get less of these articles yeah PM trader is great he's like he's a he's as good as you're gonna get if you're call she are like somebody who can drum up interest in prediction markets and is a winner. And yeah and say things that are just like outrightly false. Exactly exactly I mean I don't know him my guess is he would not say something that's just like patently untrue.

SPEAKER_01 1:39:52

No I don't think he ever like yeah I think I mean he's good friends with Foster who's we had on it was great and everything he said is either hilarious and like obviously a troll or just true.

SPEAKER_03 1:40:05

Yeah just stop at him you got him use him stop the rest of it we get to more media it seems like he's he's you know I'm jealous of how much media attention he gets and you know I get nothing but you know I'll still you got a big you got a big podcast coming up that is true yeah you're on uh who's who I mean we'll put this in the news right now but it's you fan duel founder Nigel Eccles and big buckhunter previous guest of the show the old show which isn't really the show you know just me show but uh head of everything at Novic besides being the CEO so that's gonna be fun and you and Drew uh no it's not Drew Dinkmeyer it's Adam Lovatan as the host yeah that's gonna be sweet are you excited like I am true clown of that group that is uh you know you have a titan of the industry in Nigel like you know then you have uh Henry just had a huge raise in their early employee like at the cutting edge of prediction markets and then uh and then me it's it's yeah voice of the people the voice of the people who are using prediction markets in their everyday that is that is true I am like that construction worker that I once asked for so um but yeah check that out on that's probably gonna be on the ETR feed so yeah we'll we'll plug that here and then uh just some quick hitters Colchi raises a billion at 22 billion that's great yeah we keep like saying they they're we keep like you know spending 30 minutes talking about their their follies and their strategy and they just keep getting you know sitting on more and more money so I guess uh they're they're probably there's like this like niche trading meme where it's like there's this duck duck sitting on this pile of money and like this other duck is like saying like you're trading wrong like has all these like you know algorithms on it and whatnot and it's like another duck sitting on this pile of money.

SPEAKER_01 1:42:11

That's basically us yes yes that is us. Um this was kind of funny campaign staffers tell MPR they would bet on their own candidates before polls would come out and they I said and they made thousands and I said lol in the document because it's like it's so funny when people have like inside in stuff and then they like make like$700 and like also is seriously in trouble. Like obviously this is this was under the condition of anonymity um but yeah I don't I mean I don't know like also like why is this game average like there's so much about this I just feel like I hit it is kind of kind of weird like why whatever we're not gonna have to I don't know that's all I have to no no not on that one um and then there is the Nevada friend remote the game license gonna host a game conference I think we could on a different day talk about this a bit more but I think that I think somebody like that's I think that's the newsletter like it makes more sense when you consider that like they see this as illegal the state like views this as illegal now whether like they view it as illegal they kind of like have to view it as illegal or whatever but the best quote about this was uh Victor Roca who said yeah and they also don't like host crack cocaine conferences that was a really good uh I thought that was good.

SPEAKER_03 1:44:03

Which conference would you rather go to the crack cocaine conference or the prediction racket conference?

SPEAKER_01 1:44:08

Honestly like I really want to say the crack cocaine conference but like I'm I actually it feels like I don't have the guts.

SPEAKER_03 1:44:16

Yeah I don't have the guts to go into it bummer yeah so I guess go to the PM conference with the Sean Brady fight we did get a question on this I just wanted to add this this is like a an MMA fight where there's very very suspicious you know like line movement um very late and the person that was suspected to be throwing the fight won and they won like extremely handily. I'm not like an MMA expert I'm like a casual watcher um a 10-8 round is like very rare like you go a whole you certainly go like a whole weekend without seeing a single 10-8 round um you can go like a long time without seeing I don't know exactly how rare but it's quite rare. I think this guy won like 30 25 on some scorecards. So we had like multiple 10-8 rounds and so I think that's crazy. I I you know when this when when that I you know yeah give us the give us the the most crazy thing yeah yeah yeah is like you know we were sort of talking about this early like if you have and this is like the fourth time there's been really weird UFC line movement in the past three months or something. Yeah um if you had the ability to move the market like this with the current state of like prediction markets and whatnot like I I should have I was I was I I didn't have the um time on Saturday night to I wanted to look at the volume and I wish I could have pulled like like something about like orders. I would have loved to see the orders on this fight because like tinfoil hat is like if you could move the whole market like this like there are definitely people who will quote a lot of money at like worse odds in market on you know prediction market.

SPEAKER_01 1:46:01

So like whole markets at 66% people write a lot of money at where like slightly worse prices than that like is it is it the the classic opposite fix well I mean I have you know here's the thing you know that you're gonna get a tweet about it from Dave Mason right correct and and you're gonna get like this frenzy of people betting the other side thinking it is fixed.

SPEAKER_03 1:46:29

It is fixed right you taking the other side is like not even gonna move like it's not even gonna put up red flags probably exactly with with like the people quoting on the prediction market yeah exactly exactly is you know the question needs to be asked is this okay because I think last time last time this happened is it wasn't as dominant right not even close like this was a true dominate I didn't watch the fight so I didn't I don't know how it looked but the score you know like the score is ridiculous but last time the same thing happened the guy who was supposedly thrown the fight won um I don't I don't know what the simplest explanation is with this I well if you fix that fight and did the reverse fix there's you can come on the pod and you can be anonymous um I think we do have some kind of journalistic maybe protections I don't know but yeah come on and you know we'll we'll we'll figure it out yeah I think that's a good I don't know I I I it's not a hundred percent that it didn't happen let's just say that because there's a clear you could see how the dominoes could fall but if you did that congratulations on the money um okay so we have you will definitely have to cut the at least the we had a flex three pack of questions we'll cut those and we'll try and try and get uh get through the rest of our questions why don't we just why we why don't we just jump to Trajan capitals we'll do the we'll do the couple fun questions for Evie Admire Daniel DB Bryce and Timmy you all had great questions we'll get to them uh next time we just got too many questions this time yeah okay so would you rather have feet with no legs coming out of your hips so the feet are coming out of your hips or hands with no arms the hands are coming out of your shoulders I think this is easy but uh do you want to go first I'm already I'm set like nothing you can say will change my mind. So I didn't I I will apologize I didn't get a chance to really grind through these fun questions and really think through them so I'll be a little bit why don't you go first?

SPEAKER_01 1:48:37

I think I think it it's obviously you want uh you want feet with no legs which means that you have like your arms and hands and everything like I like hands with no arms you're not going to be able to like use those on most things that you use your hands for think about like uh computers or anything in front of you like these are coming out of your shoulders you can't like open a door so do you not have legs like do you not have legs if you have like are is this a replacement you have feet but no legs so you have feet at the like where you yeah you have feet so you can like the bottoms of your hips we're saying yes exactly okay okay so you just like get much shorter exactly so you have you have feet but they you can't in this I don't think you can walk yeah if you do like you can't walk you can stand up I'd rather have legs than arms you just walk you can't do anything yeah okay I don't know I just think like we I could do my job with no feet I don't think I could do my I couldn't do my job effectively standing up in your desk chair and my chair yeah it would be fine um yeah I don't know and then like yeah you can have a wheelchair to get around which like the whole the world's like not It's not, I wouldn't say like incredibly handicapped accessible, but there it has been a lot of that's you know, wheelchairs have been around for a while, so there's some semblance of it.

SPEAKER_03 1:50:10

There probably is more accommodation for someone with leg issues than there is with arm issues.

SPEAKER_01 1:50:16

Yeah, yeah. Anyway, that was that was my take. Um, okay, uh we have Gianni. Uh have you ever accidentally humanized your counterparties by spending time in the Calci ideas section? I think everybody has. Um the Calci ideas section is void of any actual ideas, um, which is hilarious. But it is, it is, yeah. I mean, you go in there, you're like, holy fuck. Like, I don't know. I mean, I've gone in there and been like, yeah, these people, some of these people have no shot. Um, and you just gotta you just gotta say that's that's that's what happens in the competitive zero sum game. Like, but yeah, the Calci idea section. I mean, we've talked about going in there to see like what people are betting on. Um, there's some alpha in there, like as you would say. But yeah, I've gone in there and seen some shit, and I'm like, damn, that is that is crazy that there are people out there that are both thinking like that, betting like that, etc.

SPEAKER_03 1:51:30

Yeah, my favorite of the the week. Um, I saw this one pop up on the front page. It was something along the lines of will the um the hantavirus will it become like a pandemic or something? And that that is you know tearful.

SPEAKER_00 1:51:43

Oh man, I gotta get in there.

SPEAKER_01 1:51:45

Yeah, that's the thing. The best idea pages are not sports, like the sports ones are just so whatever. It's like, do you think they'll do it or whatever? Um, yes, that that, like, yes, if you go, yeah, like something like that, anything political, foreign affairs, all this stuff, like yeah.

SPEAKER_03 1:52:07

All right, we got two more. This one from Beard. Make a over-under for how many females, make an over-under for how many females have ever initiated listening to the risk takers pod on their own. Yeah, I don't know, I don't like where this is going already. On their own and accumulated over 30 total minutes of listening time. We are not counting background listening because of their boyfriend or someone who became a fan of the show via that. My favorite part of this question is the implication overheard and became a fan. Because like that, like that would not have increased the number at all. Yeah, that we're not worried about that. No, that would not have been built into my projection.

SPEAKER_01 1:52:52

Um, yeah, I think it's hard. Like, uh I think part of the spirit of this question is like your wife listening. My mom, shout out to my mom, a loyal, a loyal listener, has listened to I think all of our all of our episodes. Um, that those are somewhat coerced listeners and do not count under the uh the unrel unrelated to us in any way. My number is something like two and a half. No, I'm smashing the over on two and a half. Like, I I think it it it's it's low. Our ratio is not good or nowhere near balance, but um okay, if like like let's see.

SPEAKER_03 1:53:39

Yeah, but like there's how many regular female listeners do you think we have? Like that regular, you know, they don't have to listen to everything.

SPEAKER_01 1:53:49

I think I know that I think I we I think we have I think we have more than two.

SPEAKER_03 1:53:56

Okay. Yeah.

SPEAKER_01 1:53:57

So I've wow, okay. Yeah.

SPEAKER_03 1:54:00

I didn't know. I mean I tried to go on our our our site to see if I could see the demographics. I could not see those.

SPEAKER_01 1:54:07

I've like, I think on YouTube I saw them or whatever. It's it's it's it's really skewed. Like it's not it's not um it's not close. So what are you setting the number at?

SPEAKER_03 1:54:16

It sounds like you have a better number than I do.

SPEAKER_01 1:54:17

Oh, I was gonna say, I was gonna say, I was in the double digits. I was gonna say, like, who have listened to over 30 minutes, I was gonna say something like 15 and a half.

SPEAKER_03 1:54:28

All right, let us know if you're taking the over and under on 15 and a half. It looks like my two and a half was a bad number, but 15 and a half is the line.

SPEAKER_01 1:54:35

I I would say 15 and a half, yeah. I think like, you know, look, there's a certain there's a decent amount of uh female professional poker players, which leads me to believe that there's a good amount of like less public female sports betters who just like don't want to be present on gambling Twitter, or they work for like a trading firm who's into prediction markets or whatnot. I don't know. I'm I'm setting it. Um I actually think 15 and a half might be too low. So, but I I could be way wrong. If you're a female listener to the show and you were on Twitter, uh just let us know. I guess when we post this episode, it'd be interesting to know.

SPEAKER_03 1:55:19

All right, let's see.

SPEAKER_00 1:55:20

Okay, now the peanut question of the week, right? Yes.

SPEAKER_03 1:55:23

This one is what age are you reasonably confident, 75%. You could beat up every person in the world that is that age or younger. So for an age of five, you have to be able to beat up every five through zero year old. How much does it change if you could cut out cut out the top five percent of outlier-sized kids?

SPEAKER_01 1:55:47

Okay, so I think it changes a lot, like five percent. Like I'm I'm I'm it's multiple years. Um if we if I can cut out five percent. So my I think I I'm fairly con like if I okay, uh 75% confidence. I think nine. Like you're minus 300 versus this age group, right? Like nine times. I would hope 10, but if I'm I'm like I'm certainly not going to 12. Like 12 is like completely out the window for me. Um so it puts me somewhere in nine. I'm like, okay, let's let's let it rep. So the 10 and the 11 are like where I'm thinking I land. Um I don't know. That that's kind of like 12, it was like not even in consideration, and nine, I'd be like, well, let's do it. So I kind of feel like 10 or 11 somewhere in there is the is the number for me.

SPEAKER_03 1:56:50

So it's so funny. I I thought, you know, I I thought about this and then I actually did some research and tried to get like a gauge by the average size of these age people, and so like I'm quite a bit bigger than you. And so I would like for me, I think I'm like a 90, I would be like a 95th percentile 13-year-old or so.

SPEAKER_01 1:57:11

Okay.

SPEAKER_03 1:57:12

And so for me, I would go slightly higher than you, but not that much. I so in my head it was it was like 11 or 12. And if I can cut out the top five percent, like obviously going to the 13 and 14, there's like big differences at that age.

SPEAKER_01 1:57:27

Yeah, so I and then they start training, yeah.

SPEAKER_03 1:57:30

So I I think it's probably like 11 and maybe 13 for me, would be my guess. So the two answers. Uh I I think I'd like that for you.

SPEAKER_01 1:57:41

I would yeah, I was gonna say, like, I would maybe take you at 95% of the 14-year-olds, but man.

SPEAKER_03 1:57:52

And that's like a high school freshman, right?

SPEAKER_01 1:57:54

Yeah, there could be it could, yeah.

SPEAKER_03 1:57:59

I think yeah, and that's the other thing. Like, I don't it's five percent outlier-sized kids. Like, if I you could let me pick the five percent, because like I I could take on some some big big boys, you know. Like I would want, I would want to take out the people I don't want to fight, right? This is gonna be my intro, you know. So it's like my matchups, you know. Like I would want to match up, you know, right?

SPEAKER_01 1:58:21

Yeah, like you get to you get to veto like one out of every 20. So it's like something. Yeah, yeah. Yeah, I I yeah, yeah. I think that that that's about right. I think I'd probably, I mean, I think like at 11, I'm comfortable with the five percent veto. 12. I'm certainly not even doing, I'm not doing 13 of the five percent, so I guess somewhere 11 to 12 is is probably my five percent. This is a great question.

SPEAKER_03 1:58:51

I mean it's it's it's it's uh you know, you your knee jerk is higher. You're like because you just think of like a normal 15-year-old or whatever, yeah. But then you actually like start thinking about it and you're like, oh no, this would be much worse.

SPEAKER_01 1:59:06

Yeah, exactly. Like you it just takes like you don't even the normal, it's not even part of the equation.

SPEAKER_03 1:59:13

No, no, not at all. Right, that's what I was trying to like look at this. Exactly. Exactly. I was going down some rabbit hole of like you know, child weightlifting champions yesterday.

SPEAKER_01 1:59:22

Oh, geez. Yeah, that's the eye's coming for you, man.

SPEAKER_03 1:59:28

No, it's just just for podcast research.

SPEAKER_01 1:59:31

Research. Okay, that ain't catching. Yeah, that that's a great question by Peanut, and that's the peanut question of the week. Um, I guess we that's like four for him, I think. Three or four. So he's unfortunately locked himself into this. Um and to peanut, he had a he DM'd me a a question that was more of a broad uh it was it deserved its own episode. So just uh to to peanut, that's uh you didn't hear you know your question was really long and complicated, so I don't think you expected it to be in the cues, but you know, thank you for this. And the other one will will be addressed. Um okay, I know I know we're tight, tight on time. Did you have a Bayesian update?

SPEAKER_03 2:00:20

Uh I had a minor one, it's not not that good of one. Um, but mine is I think it's sort of related to a general theme I've given before. It's just like when things are not that much more marginally cost uh cost more, like get the good stuff. And one of the places I think this is really present is in cooking. So like think like getting simply like a slightly better ingredient can, I don't know if it's like placebo for me or actual, but it like can make the meal so much better if you just like marginally upgrade the quality of the ingredient. And I think that's you know, in my head, a lot of reason like why restaurant some restaurant foods are just like better is they they care more about that type of stuff. So my my update is to when cooking, um, don't just you know get you know whatever ingredient is like just in front of you at the grocery store. Try and you know be a little bit more thoughtful and get the good ingredients.

SPEAKER_01 2:01:17

I like it. I actually thought you were gonna go like pots because it's funny, like we have a lot of shitty pots, and then we have like one nice pot I think like we got as a gift. Maybe it was like a wedding present, and that's like the only pot we use.

SPEAKER_03 2:01:31

So it's like that's that's a great one. Like if you ever are finding yourself saying, like, I really like using the nice X, whatever X is, like that means you have a bunch of you know crappy versions of X, just get more of the nice ones, you know.

SPEAKER_01 2:01:46

Right, right, exactly. Like it's like I there's now things in there we don't use because of that. We just wait. We either you have to like wash it right away and cook, you know, cook again or or whatever. Um my my update is and this is this is gonna be a shout out to Dylan, who Dylan is a uh part of our SC Charleston betters crew. If you're in Charleston and you wanna you wanna join the betting capital of the world and meet up with us, let us know. But on small, this is this goes against what this goes against you seriously. So this is gonna be, you're gonna, you're not gonna agree with us, but more small meals a day. Um Yeah, you uh you're shaking your head. This is just this is not for you. But I've kind of so he we had we had uh we had a dinner with our friend Dylan, and he said that he eats like five small meals a day. At the time I was just being an idiot and doing the three meals a day. So stupid. What now I'm starting to do is break it down um and have, you know, a dinner is gonna be dinner. That's gonna be a big meal, but the rest of the meals can be just quick hitters. So like uh it could be like a smoothie for breakfast, like a little bit of like an overnight oats type thing, like before when you traditionally have lunch. Then you could have like a later lunch after, and then have like a I don't know, like one bar, like protein bar, and then have your dinner or whatever. But like this this spreading out, it's helped me keep my energy through the day a lot better. And I'm kind of in on it.

SPEAKER_03 2:03:33

You know, I honestly I don't hate it. I think if you you know the reason we disagree is I'm I'm very much like a generally a one meal a day type of person. I think the the last thing you said about keeping your energy, I think you just don't want to be like overeating multiple times a day. Yes, is like the key. And I think if you eat a bunch of small times or you don't eat at all, both of them, in my like in my experience, could achieve a similar like so you have more energy throughout the day.

SPEAKER_01 2:04:02

Yeah, yeah, I think I think that's it. It's just kind of like you, you know, thinking about food as like you know, a tool almost. Like, how is this best interacting with me? Or like what you know what and I'm somebody who like I'll just get like really like hangry, shaky. These are tendencies I have. So the small meals, like I think keep me keep me kind of leveled out for most of the day. So anyway, if that's if that's you think that could be uh your tendencies, like I'd say it's I'd say it's worth a try.

SPEAKER_03 2:04:41

Two food-related updates, I like them.

SPEAKER_01 2:04:44

Um well thanks everybody for all the we actually had so many questions, and I like honestly, there's a decent amount of news where like this was probably the first episode we were truly overloaded and had to cut like a ton of good stuff. So we have everybody's questions who uh we didn't get to, and we will put those on our next uh solo pod. So thanks everybody for listening in the cues. Anything uh from USB?

SPEAKER_03 2:05:16

Nope. We'll see you all next week.

SPEAKER_01 2:05:18

Sweet.

SPEAKER_03 2:05:21

You have a really bad day, and you're like, okay, that was probably too bad of a day. Let's not do that again. What do I need to change to make sure that doesn't happen again? And that's like, you know, like if I was doing if I was doing combos, like that's basically what I would do is I would guess what I think my parameters should be in terms of like per leg exposure, um, per combo exposure, like maybe two, three, however many, like to say I want this much on this type of combination and this much on per leg. And you'd probably be pretty aggressive on that, or at least I would be. And then something like bad would happen, and I would look at it and be like, that was probably too much, and then I dial it back to get it like how I want it. And it's like an ever evolving process. I think that basically just works.