This is a very nice demonstration of the robustness against manipulation of well-funded prediction markets. The attempted manipulators spent millions of dollars to drop Trump 5% and bump Harris 3%. The market quickly took their money, pushing both candidates back to (roughly) their previous prices, and the manipulators were unable to achieve their goal, which only required them to keep the market distorted for a three hour period.
Of course this particular market is unusually liquid! Markets that don’t have much liquidity or many people watching them are easier to distort for longer. But if prediction markets continue to thrive (despite recalcitrant regulators), we should expect to see them become much more liquid (more like commodity exchanges or options markets, which are quite tough to manipulate — although the successes make for fascinating stories).
There was a spectacular attempt at manipulation on Polymarket yesterday, and you can see evidence of it in the following sharp price movements:
What happened was this. A group of traders bet heavily on Harris and against Trump in an attempt to push her into the lead for a couple of hours. The sums involved were quite large, with one trader alone wagering about 2.5 million dollars. The goal was to ensure that the Harris contract would have the higher price for a majority of minutes during the three hour period between noon and 3pm EST on Friday, in order to profit from a derivative market that referenced prices in the primary market.
