Quant explains how to actually get rich quick

What up, guys? In this video, I'm going

to teach you how to make free money

trades legally. But first, I want to

give you some contextual background on

insider trading. Most people don't

realize what a gray area insider trading

is. Even your casual real estate buyer

or seller, you know, when they find out

that Section 8 housing is coming into

their town, they might try to sell it to

someone who doesn't have that

information. And I have some Chinese

friends that had family in Wuhan and

they definitely knew that the CCP wasn't

being forthright about how severe COVID

was and how contagious it was. So when

CO made it to the United States, they

definitely shorted the market, made a

ton of money doing that. And for sure

Osama bin Laden's family and friends

made a ton of money off of 9/11. So, in

the days leading up to 911, the puts on

American Airlines and United Airlines

had about 10 times the trading volume as

the calls, meaning that people were

betting about 10 times as aggressively

that these stocks were going to go down.

And no other airlines had nearly the

same put call ratio. It was just these

two airlines, which were of course the

two airlines involved in 911. Of course,

the 9/11 commission concludes that there

was no unusual activity and just a

coincidence, but give me a break. like

Morgan Stanley and Croup, two companies

that had over 22 floors in the World

Trade Center, had over 45 times the

usual trading activity in the days

leading up to 911. So, you know that Bin

Laden's family and friends made a ton of

money off of 9/11. Frankly, there's just

no way to catch them. But as far as

trying to be an insider trader, you have

to have access to rare information and

you're taking a huge risk because it's

clearly spelled out by the SEC that it's

legal and you risk prison time. But did

you know that there is a new financial

market where the inside information

isn't rare and you don't risk prison

time? In fact, it's completely legal.

It's these new betting markets like Poly

Market and Calshi. So, take this Super

Bowl streaker for example. He bet

$50,000

that there would be a Super Bowl

streaker. And based on the odds of the

bet, he was able to make over $300,000.

And the only reason he got caught is

because he kept running his mouth and

bragging about it. But for sure some of

his friends and family got away with

their smaller bets because there's

really no way to track that down. So

he's like a bin Laden and how he decided

to sway the outcome of the market by

himself. Of course, he's not going to

serve any prison time like Martha

Stewart because his actions are in a

legal gray area while the SEC is

figuring out how to regulate these new

prediction markets. Another recent

example of insider betting on Poly

Market is with Taylor Swift and whether

she was going to get engaged. The Poly

Market had a market on whether this was

going to happen. Clearly, an inside

trader came in who knew about the

engagement way before the public did and

he placed some huge bets moving the

entire market. Even if it's obvious to

everyone that this guy's insider

trading, there's no way to catch him

because in Poly Market, all you have to

do is make a Polygon wallet and your

identity is completely anonymous. And

this is by design, but I'll get into

that later. And the last example I can

think of is this HBO documentary on

Bitcoin and what the conclusion of the

documentary is going to be. There was

tons of betting activity on the

conclusion of this documentary. What is

stopping anyone who worked on this

project at HBO from betting on it? So,

you know that people who worked on this

project and knew the conclusion of the

documentary definitely bet on it cuz

there was a lot of strange activity in

this betting market. Of course, the way

the market ended up predicting was what

ended up happening. And again there

there's no way to track down inside

betters. So what exactly is happening

here? These prediction markets, not only

is it easier for an everyday person to

get inside information, but the

businesses that run these prediction

markets want you to insider trade. Let

me explain. It all starts with

understanding what the business model of

these prediction market companies are.

Most people would assume that their plan

is to just make money off of fees. And

for now, Poly Market doesn't charge any

fee because they're just trying to grow

their user base because volume and

trading is so important to build

liquidity and trust in the marketplace.

But the fee structure isn't actually the

true business model. These prediction

markets, their true value comes in

accurately being able to forecast the

future. Their true business goals are

actually to be able to compete with

Bloomberg Terminal and other data

providers. Having actual predictive

correct data is incredibly profitable in

the world we live in. For example, poly

market in these prediction markets were

better at forecasting that Donald Trump

was going to win the presidency in 2024

and that's going to directly impact the

stock market. So having tick fortick

live data on what's happening in the

most accurately priced prediction market

can be used as a feed into an automated

trading algorithm. So, what these

prediction markets actually intend to

do, and this is just coming from my

experience as someone who worked in the

industry, they're planning to charge

people for their data through some kind

of subscription model like how Bloomberg

is a couple thousand dollar a month, and

they're planning to add some kind of a

live API feed so you can get the live

betting market data before everyone

else. And what Bloomberg does typically

is that you'll get a 15-second delay

unless you pay an arm and a leg for the

live high-speed data. So, I'm guessing

they're going to do that as well.

they're going to charge their

institutional clients an arm and a leg

to get access to the live data because

what what can you do with that live

data? You can arbitrage between the

prediction market and an actual trady,

you know, traditional financial market.

Even Poly Market, they rolled out

prediction markets on earnings, for

example. So, you know, you have

quarterly earnings for companies like

Google. And if you have a prediction

market on whether the earnings are going

to overshoot or undershoot and some

insider trader comes in is just betting

that it's going to overshoot by a ton,

you can guess that the actual stock

price is probably going to outperform as

well. So there's an arbitrage

opportunity that exists there. And the

faster you can get that data, the faster

you can profit off that arb. And there's

there's potential for them to have uh

government clients as well. you know,

prediction markets on whether China is

going to invade Taiwan. Things like this

can be really useful for the government

in terms of mobilizing their navy in

advance. And they can charge a ton of

money to the government as well, kind of

like how Palunteer does. So, you can

quickly see why they have an incentive

to allow insider trading. And if you

look through their fine print, you'll

notice that there's no place where they

explicitly say they don't want insider

trading or they use any kind of language

like that. It's because, frankly, they

need insider trading to make their

prediction markets more accurate. What

they're trying to do is maintain the

delicate balance between having insider

traders while also not allowing people

to have that perception of them so that

market makers come in and still provide

liquidity to the markets. So for people

who aren't familiar with financial

markets in general, there's always

multiple players in the market. There's

market makers who attempt to put out

both bid and asks so that they can scalp

intraday multiple times a day. They

provide liquidity by letting other

people come into the market and trade

with them. And of course, there's other

market participants as well, like

there's hedgers who made a bigger trade

in another market and they're just

placing a bet in that market just as a

hedge. But I don't want to get lost in

all the details. The point is that

there's generally market makers and then

there's speculators. And some of these

speculators have inside information. So,

they're willing to bet huge and they're

just running over the market maker. And

so there's this delicate balance that

these prediction market companies have

to make where they have to act like they

want integrity in the market because

they want market makers to come in and

provide liquidity but at the same time

they tacitly want people with inside

information to come into the market and

trade on that inside information so that

they push the market in the direction

that make their markets more predictive.

That way they can reach their end goal

of having this high quality, valuable,

predictive market data that they can

then charge to institutional clients for

large sums of money. So finally, how

does this apply to you and how do you

make money off of it? So the most

obvious answer is because you know that

these prediction markets want people to

insider trade and it's a legal gray area

and you won't go to prison for it. At

worst, you're going to just get a fine

if you get caught. It's a free money

opportunity at present. So, of course,

there's the example of the Super Bowl

streaker and how he manipulated the

market himself by running onto the

field. That's kind of extreme, right?

For you yourself to impact the market.

More casual examples like the Taylor

Swift engagement example and the HBO

special. If you are in those situations,

then yes, obviously look to see if

there's a prediction market out there

and you can profit off of your insider

knowledge. The thing is almost anyone

can do this because you can just create

your own prediction market at any time

on these sites like Poly Market. So

let's say you work at Tesla, you find

out that the new Model X is going to

have a complete body redesign. So you

can just put a market out there for

that. Is Tesla going to have a new body

design on the Model X in 2026? And then

when there's volume that comes in, when

market makers come in to create the

market, you can just trade against them,

make a ton of money. So almost everyone

has some kind of inside information

wherever you work. There's usually some

kind of valuable knowledge, insider

knowledge that you have. So you just put

that information out there on a

prediction market and see if you can

profit off of your knowledge. But if you

just don't work in an area where you get

access to private information like that,

you could always just find a friend who

you know does, you can make the trade

for them and then agree to some split.

Okay, I'll give you 50% of the profit.

Something like that. And lastly, if you

just don't know anyone that might work

somewhere where they have some kind of

inside information, you can basically

track down insider traders. There are

already tools that people have built to

attempt to do this. Insider traders in

these big illquid markets have obvious

betting patterns. A lot of times they'll

be completely new accounts. They'll come

into a market just confidently start

making huge bets and pushing the whole

market in that direction. And over 50%

of the time when you see activity like

this, it's going to be a winning trade.

like it's not going to be exactly 5050

like you would think if it was just a

degenerate gambler doing that. So you

can write code or vibe code up some kind

of insider betting whale tracker that

tells you when this kind of activity is

happening in any particular betting

market and you can just piggyback on

that whale. I expect this kind of a

trading strategy to last for at least a

couple of years. So hopefully you

learned something about these new

financial markets. Prediction markets

are going to be a big part of the future

financial market. There's going to be

tight integration between prediction

markets and traditional financial

markets. And in the early stages, that's

where all the opportunity is because

it's still gray area and unregulated.

And that's true with all businesses. For

example, when futures first came out,

there were a lot of traders. I know

traders who were spoofing and the

regulators didn't come out and regulate

it for years and years. And once they

regulated it, the original spoofers

already made all their money. I mean,

these are guys who are founders and CEOs

of trading firms that you've probably

heard of now. That's the game. I mean,

Travis Kalanic of Uber understood that

when he just went into cities and

started setting up shop before

regulators could figure out what he was

doing. Don't ask for permission. Ask for

forgiveness. That's how a lot of these

guys make their fortune. They're smart

enough to see the trend of how things

are evolving to get ahead of

opportunities while they're still gray

and unregulated. And that's where we are

right now with these prediction markets.

So, I wouldn't miss the boat on it. All

right, let me know if you have any

questions. Take it easy.