Negative Risk on PredictIt (Arbitrage Profits from Politics)

Introduction to PredictIt

PredictIt is a legal political platform that allows interested individuals to place wagers on political events ranging from the 2020 Presidential Election to the leader of North Korea on 12/31/2020.

Unlike traditional betting, PredictIt allows the individual to take a “Yes” or “No” position, both quoted between $0.01 to $0.99 per share. Suppose we believe Joe Biden will win the Presidential Election, we can either wager “Yes” on Joe Biden winning or a “No” on…