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by caminante
531 days ago
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> Now if you were going to do this for large scale profit, one of the things you are going to have to do is stop the illusion you're modelling skill and start modelling corruption. Well...I reject that dichotomy. If someone intentionally introduces an exploit, sure. But I can think of numerous examples where someone found "bugs" and exploited them, while playing by criminal and ethical rules. It sounds like you realized that these are just rare and hard to reproduce without taking on more legal risk. Hats off to the people like the Stats PhD I linked to who ran a multi-person outfit and everyone has kept their mouth shut. A similar exploit happened recently where a syndicate bought all of the lotto combinations. The math was straightforward, but execution was hard. They had to spin up a few licensed terminals at shuttered storefronts to execute all of the purchases. This forced a rule change. |
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But as a general rule there's a trade off between signal generated by your winnings vs the frequency of your trading all balanced against your power and ability to manipulate and capture the market.
If you bet big enough and pull off the implementation successfully once such that you can get away in that one time (and ensure the system doesn't respond to cancel your winnings as it will often try to due to the cost benefit of paying you out), congrats. And you can go the opposite strategy and have lots of small winnings and fly under the radar and make profit just below the cost of entry or dealing with you, but you won't make squillions.
If anyone repeatedly makes big money, what is almost certainly going on is some other expression of market power, because if you don't have that power, the real market power will make the calculations on shutting you down once you're detected.