Longshots and 'sure things' on Polymarket
Very cheap shares tend to be overpriced and very expensive ones are not risk-free. Buying at 95¢ risks 95¢ to make 5¢; one surprise wipes out many wins.
The longshot bias
Across betting and prediction markets, people tend to overpay for small chances of big payouts. A 3¢ share pays 33× if it hits, which is exciting, but the true probability is often lower than 3%. As a percentage of what you pay, taker fees are also highest on cheap shares.
The “high-probability” trap
Buying shares at 95–99¢ looks like collecting a safe yield. Sometimes it is a reasonable use of idle capital. But you need to be right 19 times out of 20 at 95¢ just to break even, and resolution surprises, disputes and rule technicalities cluster exactly in “obvious” markets.
What to do instead
- Estimate your own probability first, then compare it with the price.
- Read the rules extra carefully on “sure things”.
- Treat cheap longshots as entertainment-sized positions.
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