there is some inevitable "insider trading" in commodities markets. for example if you're a giant agricultural company, and you want to hedge the price of soybeans, you have some extremely relevant insider information about the soybean market. but you're still allowed to trade soybean futures. very different than securities.

if prediction market contracts really are regulated as commodities, then presumably a lot of insider trading must be legal, although there must be limits of one kind or another and probably if you do something really egregious you might be prosecuted under some legal theory.

> Clearly, these insiders have figured out a way to cash in on information. Whether that's kosher is out-of-scope here

To the extent that the value of prediction markets is in their power to predict, insider trading is kosher. Wholesome even.

Isn’t this the motivation behind polymarket? To incentivize those that have information to bet as a signal of “truth”. What I don’t get is why would anyone bet on this stuff that don’t have insider information besides those with gambling addiction.

Out of curiosity, is it possible to see everyone's bets and positions in real time?

Or is the info only available later?

I'm guessing that bots predicting insiders and copying positions is already a thing.

iirc polymarket doesn't explicitly rule against this, and neither does the law. prediction trading like this operates as "commodities" trading, so they have no obligation to prevent this, and indeed they have an financial incentive to let it continue (assuming others don't leave the platform!)

Not sure why the dumb money keeps playing. If you're not the insider the person you're trading against is.