Joe Peta

Author: Trading Bases (2013); A 2019 Masters Preview. Prior: ESPN Chalk, lead baseball writer (2015-2017.)

2023 Release: Moneyball for the Money Set

[Joe Peta @MagicRatSF]

Spring '95. Tiger, still largely unknown outside golf circles, is in a study hall with many Stanford athletes. They exchange Spring Break destinations.
Tiger: "Going to the Masters"
Greg Comella (Stanford RB): "That's the toughest tix in sports! How?"
Tiger: "I'm playing."

[Kyle Porter @KylePorterNS]

Tiger's 46 today. Give me your favorite tidbit, stat or story about the Cat. I'll throw some of mine out there a bit later.

[Joe Peta @MagicRatSF]

@BBGreatMoments Assholes steal content. Now go offer @Super70sSports reparations.

[Joe Peta @MagicRatSF]

@fairplaygov Thank you. The excerpt in the tweet certainly is misleading then.

[Joe Peta @MagicRatSF]

Imagine the gov telling a Deerfield resident that EVERY SINGLE TIME he makes an investment in midwestern homebuilder Toll Brothers, or rebalances bond risk in his IRA, he has to pay the state 1.75% of the transaction.

Destroy efficiency and innovation with taxes and then wonder why Citadel abandons Chicago.

[Alfonso Straffon 🇨🇷🇺🇸🇲🇽 @astraffon]

"Prediction market operators will be required to pay a transaction tax equal to 1.75% for each exchange wager. After the first five million exchange wagers conducted by a prediction market during a fiscal year, the transaction tax will increase to 3.5%."

Approved Illinois Budget Includes New Sports Event Contract Tax
https://t.co/YHO3ZwAo7c

[Joe Peta @MagicRatSF]

@QuantCoach I might add that to "sunlight is the best disinfectant" and "like porn, I know it when I see it," as go to SCOTUS quotes.

[Joe Peta @MagicRatSF]

@bbrizzzzzz @Polymarket Congratulations Brooke and team. We look forward to future participation.

[Joe Peta @MagicRatSF]

When I was Lehman’s market maker on Healtheon (remember that one?!?) Janus got so frustrated trying to buy massive amounts for the Janus 20 fund, they went straight to the company and did a direct secondary — at no discount to the closing price — for a huge amount (roughly 5% of Janus 20 AUM.) would have been fall 2000 or early 2001.

(P.S. It was a disaster for Janus.)

[Joe Peta @MagicRatSF]

@chrisfallica @andrewssports Goes down as effortlessly as a Jersey girl at a Springsteen concert.

BOOM!

[Joe Peta @MagicRatSF]

@WCCSG_ Greg Comella, FB

[Joe Peta @MagicRatSF]

@orrdavid One of my favorite factoids is how amazingly similar (and in-line with long-term returns) the SPX, NDX and COMP returns are from the notorious March 2000 top.

[Joe Peta @MagicRatSF]

@orrdavid If you bought NASDAQ 5000 on (first week?) of March 2000, do you know what your annualized return is thru today? 😉

[Joe Peta @MagicRatSF]

@JoeyKnish22 Both can be true?

[Joe Peta @MagicRatSF]

David, I’m a bit puzzled by your co-sign here. You know where I work; everyday we are advancing conversations with our largest multi-$B customers who are itching to make $5M, $10M trades with us — to start — and not a single market on their “indication of interest” list, has anything to do with sports.

Obviously, block trading and broker intermediation, our sweet spot, are works in progress, but I have zero doubt that in less than a year sports contracts will be a dwindling minority in terms of matched volume.

[Joe Peta @MagicRatSF]

@LCDail

[Mike Meech @meechone]

Hey @ArtButSports

[Joe Peta @MagicRatSF]

@LouStagner I like it. I’d also suggest something similar to speed chess. 36-hole event where every round must be played in say, 3 hours.

[Joe Peta @MagicRatSF]

@coopmavs Denzel Clarke requests a recount.

https://t.co/HLf6ljwGw9

[MLB Network @MLBNetwork]

We’ll be talking about this catch by Denzel Clarke for a LONG time 🤯

MLB Network + @CapitalOne

[Joe Peta @MagicRatSF]

@GUP_GC My favorite memory of the Giants World Series runs was Bay Area native and life-long fan, Steve Perry, leading the crowd in the 7th inning sing along to that song (if the Giants were losing.)

https://t.co/LDy7C39PnD

[Joe Peta @MagicRatSF]

@samtb23 @RufusPeabody @roundrobin42 You'd be very, very wrong. Hey, that's what makes markets -- a difference in beliefs.

[Joe Peta @MagicRatSF]

@RufusPeabody Our latest discussion actually builds on a very cogent point you made to @roundrobin42 about PMs/exchanges wanting their patrons to "lose slow."

Building on that, when there is patron-to-patron(*) matching, no matter who wins, the money never leaves the exchange ecosystem. So, absent withdrawls, it will always be recycled, to the fee-collecting exchange's benefit. This results is an enormous difference in exchange incentives and post-betting behavior. As you know, the traditional bookmaker must now attempt to get the losing patron to reup, which results in all sorts of predatory behavior. It's a never ending marketing push to extract more deposits.

The exchange would like the loser to reup, of course, but it's not nearly as crucial -- because the funds are still in the exchange ecosystem. And if they do reup, unlike the traditionals, the collective customer wallet has actually grown! It's a massively superior long-term business model, to my eye, for every stakeholder.

(*) My point to Issac and others trying to force PM to DK/FD comparisons, is that there are a lot more patron-to-patron matches than assumed. That has a huge effect on the business model. And, from being on the inside of an exchange, I believe there's an optimal percentage of each matching basket (MM-to-MM, patron-MM and patron-to-patron) and the best PMs will figure that out (instead of trying, to say, scalp $HOOD patrons for all they can.

[Joe Peta @MagicRatSF]

That's two different aspects of the business. From a displayed liquidity standpoint, it's indisputable that exchanges need professional (institutional) market makers to attract patrons, and by extension to exist.

As I like to think of it, displayed liquidity is the light the attracts moths. But that's not execution.

Take a look at ATH@PHI right now on an exchange, say Novig. The inside market is +117/-121. Let's assume those are institutions offering. (Looking at the depth of the market, it's more likely "they" are at +116/-122, but whatever.) If an impatient, "buy it now" bettor pays -121 for the Phils, that's a patron-to-MM match. But if a patient bettor puts out a -117 offer to the market on the Phils, then the next Athletics bettor that pays +117 will be matching patron-to-patron. The market maker attracted the moths with displayed liquidity, but the moths mated on their own.

Exchanges want patron-to-patron matches for a variety of reasons, but they also want MMs. It's a bit of an art to create -- or limit -- the incentives to optimize the mix of business. (MM to MM matches have some value too, incidentally.)

[Joe Peta @MagicRatSF]

@samtb23 @RufusPeabody @roundrobin42 What evidence? I've never seen data published showing the three potential buckets (MM-MM, MM-patron, patron-patron) from an exchange. Can you point me to something? I've love to see. (The assumption from outsiders is it's all patron-to-scary "sharp" MM, but that's not data.)

[Joe Peta @MagicRatSF]

@samtb23 @RufusPeabody @roundrobin42 I have years of data and first-hand observation advising a sweepstakes exchange. I don't cite percentages because that's a "secret sauce" at each operator.