wubbles comments on [LINK] Bets do not (necessarily) reveal beliefs - Less Wrong

12 Post author: Cyan 27 May 2013 08:13PM

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Comment author: wubbles 31 May 2013 12:25:30AM 2 points [-]

Intrade sells fed OMC rate binary options. I think if the market was more liquid, it would absolutely get used to hedge interest rate risks, and as people tend to be long bonds and short rates as a result, there might be a bias towards predicting higher rates as people want the protection. But the total holdings and the degree of hedging would be very opaque. Policy prediction markets could have similar problems.