Comment by thephyber
5 hours ago
> Functionally shorting a stock is not much different than a Polymarket prediction.
But can you short a stock if you are a director at that company?
The problem people have with betting markets isn’t that you can bet on an event. It’s that the event’s outcome might be shaped by the same people (or friends of the people) who actually shape the event.
This is why there are so many articles speculating who bets on Trump winning the election, or which company buys Time Warner or when Venezuela is attacked or when Iran is attacked. Maybe the winner is just a super forecaster in their own house or maybe they are a cabinet secretary walking into the Situation Room.
Sports betting was illegal until the last decade and the sports leagues in the USA had extremely stiff penalties for violating these rules. I’m still not sure what changed (other than money buying the crumbling of regulation).
> But can you short a stock if you are a director at that company?
You can, if you cover your tracks well enough. Or donate to a President willing to keep the SEC off your back.
I get that people in power can place bets on their own actions. But again, they can just do that in the stock market. A lawmaker might know a law is going to pass and trade on that insider knowledge. Or maybe the vice president owns shares in Haliburton and then helps encourage invading Iraq... what's old is new again, I guess.
In many companies this is not allowed.