I didn’t mention it, but of course another benefit a lot of proponents reference is price discovery. This is certainly a real benefit (though, I am a bit skeptical about some of the claims of the extent of utility), but as an individual not a good reason to trade. I have seen some, like Scott Alexander, argue that platforms will pay traders to use them. This seems facially implausible to me and not clear how it would be structured. But in any case, it isn’t how the platforms actually work (some do pay interest on positions, but they pay less than the risk-free rate).
Also, some have argued for actually encouraging insider trading, since allowing insiders to trade will make the prices even more accurate predictions. Even if we grant this argument, this makes it even worse reason for a typical trader to enter the market. It would mean paying a premium to play an unfair game, paying to get worse odds seems inherently non-sensical.
I didn’t mention it, but of course another benefit a lot of proponents reference is price discovery. This is certainly a real benefit (though, I am a bit skeptical about some of the claims of the extent of utility), but as an individual not a good reason to trade. I have seen some, like Scott Alexander, argue that platforms will pay traders to use them. This seems facially implausible to me and not clear how it would be structured. But in any case, it isn’t how the platforms actually work (some do pay interest on positions, but they pay less than the risk-free rate).
Also, some have argued for actually encouraging insider trading, since allowing insiders to trade will make the prices even more accurate predictions. Even if we grant this argument, this makes it even worse reason for a typical trader to enter the market. It would mean paying a premium to play an unfair game, paying to get worse odds seems inherently non-sensical.