I work on prediction markets, so I see it all as bets, and am used to thinking that both participants in a purely financial trade can gain from it, even though many people on the outside of the deal see it as zero sum. Sometimes you increase your variance because you think it’s worth increasing your expected return, other times you reduce your variation.
Agreed.
I work on prediction markets, so I see it all as bets, and am used to thinking that both participants in a purely financial trade can gain from it, even though many people on the outside of the deal see it as zero sum. Sometimes you increase your variance because you think it’s worth increasing your expected return, other times you reduce your variation.