Comment by gpm

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...