The Risks of only Buying 'NO' on Prediction Markets: 1) Most markets resolve to NO - A majority of Prediction Markets resolve to 'NO'. This is because most outcomes are unlikely and "Nothing Ever Happens" - Statistically, “NO” is the base-rate trade, like betting against rare outcomes [ ](https://x.com/factcheck1ntern/status/1966761055230849284/photo/2) 2) Analogy to covered calls / short volatility - Buying NO = taking the other side of event hype, similar to selling options - Like selling calls, you earn steady premium (market bias toward unlikely outcomes) - You’re effectively short volatility (on one side) -> benefiting when nothing extreme happens [ ](https://x.com/factcheck1ntern/status/1966761055230849284/photo/1) 3) Yield profile - Small, consistent returns when events fizzle out - Looks like free yield because most events never occur 4) Tail Risk - You consistently reinvest profits and Buy 'NO' on unlikely markets - Eventually an unlikely event occurs which completely blows you out and wipes out months of steady gains 5) Managing Risk - Don't overexpose yourself to a specific market. Spread out your bets. (e.g. no more than 5% of your total portfolio in one market) - Have an expected value calculation for each market so that you know when the trade might go against you - Only trade in markets where you have an edge In calculating probabilistic value of a payout, there are two factors — probability % and the payout on event occurance. Just probability %age may not tell the entire story. The strategy may still hold water after factoring into account payout but guess more data is needed. Also betting “No” is not writing calls, it’s buying puts because the bettor has to pay premium for making a bet (option buying) instead of receiving premium for making a bet (option writing) and there is no unlimited risk either. The strategy may have economic outcome similar to a short straddle but the instrument construct is entirely different. https://x.com/MovieTimeDev/status/1966924373178056773