Legal and ethical gray areas. Commentary has described concerns about insider information and sensitive event markets. Market design and moderation policies matter.
Prediction markets sit in a legal and ethical gray zone in some contexts. Here are the key risks to understand before participating.
Responsible research approach. If you are researching markets for information rather than participation, focus on resolution rules, data sources, and transparency of outcomes.
People may trade on private information. Even if allowed on a platform, it can raise ethical concerns.
Low-liquidity markets can be pushed around by a few accounts. Watch spreads, depth, and sudden price jumps.
Smart contracts, wallet security, phishing, and platform outages can all cause losses independent of market direction.
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Starter plan
Most popular plan
For & agencies
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Risk management. Use position sizing, diversify exposure, and set clear exit rules. Avoid making decisions solely based on a single market price.