Axén, Gustav; Cortis, Dominic - In: Risks 8 (2020) 3, pp. 1-14
The possibility to use hedging strategies is an often neglected aspect in the literature on prediction/betting markets … paper, we derive the key mathematical results in using hedging strategies through taking opposite positions to an initial … probability of the outcomes. We also discuss two sources of inefficiency that can arise when using hedging strategies in practice …