Comment by gpm
16 hours ago
Yes - we agree on how the pricing and odds work now :)
The hitman shouldn't expect to capture the value of the entire open interest. The market here is serving to negotiate the bounty with speculators betting that too much was offered taking the rest (a privilege they pay for by buying contracts that only pay out if they don't take too much). It's a curious form of negotiation since the people paying for the murder don't participate... but should (in a very theoretical efficient market) come to a "fair" (large enough to get the job done, and no larger) payment for the hitman.
2xing your money in a night is a huge payout, I think you're overestimating how high the multiplier on the capital requirement needs to be. That said, if you aren't, and you need a 5x payout to find a hitman then no rational speculator would purchase contracts for more then $0.20...
It's only a huge payout if you have a huge amount of money. If you have $1k to put in, you get $2k out. Who's risking getting caught and potentially facing the death penalty for $1k in profit?
If someone already has significant money backing, and especially if that person already has some other specific reason to want you dead, I can see how it might be added incentive, but even so, you also now have to tip your hand. To buy in hard, you have to send a signal saying you have reason to be confident I'm about to die. You're basically shooting yourself in the foot right before trying to shoot me in the head.
Plus, it's not like the markets are anonymous. Polymarket isn't trading with Monero. You're not just tipping your hand ahead of time. You're pointing the investigators right at yourself.
I just don't see how the calculations end up falling in favor of killing somebody if you weren't already planning to do so.