Republican Donald Trump’s odds of winning the 2024 presidential election briefly skyrocketed to 99% on Polymarket, a prediction platform, due to a significant purchase of over 4.5 million Trump contracts by an individual or entity named “GCorttell93.” This purchase, totaling over $3 million, caused a temporary mispricing in the order book, leading to a portion of the transaction being filled at 99% odds, much higher than the actual 63% odds offered at the time.
The mechanics of the order book on Polymarket allow for dynamic pricing based on market belief in the likelihood of an outcome. The platform operates on a blockchain-based system that lists all buy and sell orders for shares in an outcome, allowing for price discovery and liquidity. Traders can place limit orders specifying the price they are willing to buy or sell at, which may not execute immediately if there is no match.
In this case, a market buy of Trump contracts led to a temporary spike in odds, showcasing how large trades can impact and skew betting odds on prediction platforms. Despite the anomaly, the overall odds for Trump winning the election remained at 63%, with Democrat Kamala Harris trailing at a 36% chance of winning.
The election winner bet is one of the largest markets on Polymarket, with over $2.2 billion in transactions. The platform provides transparency in market interest at different price points, allowing traders to assess the true market price of bets compared to centralized betting marketplaces. This incident serves as a reminder of how individual trades can influence and briefly distort betting odds in prediction markets like Polymarket.
While the brief mispricing may have provided an opportunity for the trader who purchased the Trump contracts, it also emphasizes the importance of understanding the dynamics of prediction platforms and how trades can impact market odds. As the 2024 presidential election approaches, it will be interesting to see how these odds fluctuate based on new information and trading activity leading up to the election day.