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gwern comments on Open Thread: July 2009 - Less Wrong
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One must be wary of faux precision. But I think I would put the odds of >100% or <-40% at under 30%; I'd assign another 10 or 20% to a gain between 30% and 100%, and leave the rest to the range of small losses/gains.
The ten categories I suggested may be a bit excessive, but it would be much easier to judge if you were a little more precise. You acknowledge a non-trivial chance of losing a non-trivial amount of money. The confusion is that I thought your previous statement that a "smart bias-educated person can beat the prediction markets fairly easily" would preclude this.
There are arbitrage opportunities, but they're not what I'm thinking of.
An analogy: knowing about biases and how to play optimally is important to play poker at any high level; but that still doesn't mean you're going to win every hand. I might correctly call an election for Obama, but that's not going to help me as a trader if he abruptly dies of a heart-attack or Sarah Palin stages a coup with a crack unit of Alaskan hunters - I'll still lose my money. I don't see any contradiction here.