Inside Information
In prediction markets, prices are meant to reflect publicly available information and collective reasoning. Inside information refers to facts that are not yet public but directly relate to an event’s outcome.
This information might come from private access, confidential sources, or restricted decision-making processes. Trading on it can shift probabilities before the broader market understands why. Inside information can distort market signals. Early price movements may appear informative, but they do not represent shared knowledge or transparent forecasting.
Markets and platforms often attempt to limit the impact of inside information. Rules, monitoring, or restrictions are used to protect fairness and data integrity.
For analysts, inside information explains sudden probability changes without visible news. It highlights situations where prediction markets data may lead public information rather than reflect it.
Why It Matters
Inside information undermines fairness and signal clarity. Understanding it helps users interpret unexplained market moves with caution.
What does inside information mean in prediction markets?
In prediction markets, inside information is non-public knowledge relevant to an event’s outcome. Using it for trading creates an uneven playing field. Prices may move before information becomes public. This challenges transparency and trust.
How does inside information affect prediction markets data?
Inside information can cause early probability shifts that lack public explanation. Prediction markets data may appear prescient but is driven by asymmetric access. Analysts may see sharp moves before news breaks. This complicates interpretation and backtesting.
Why is inside information important when using prediction markets APIs?
Prediction markets APIs surface probability changes without explaining their cause. Analysts must consider inside information when unexplained moves appear. It provides context for sudden shifts ahead of public events. APIs make these anomalies visible but not their source.
Real-World Example
On Polymarket, a probability may move sharply shortly before an official announcement. If no public news exists, the move may reflect trading based on inside information.
Inside Information and FinFeedAPI
FinFeedAPI’s Prediction Markets API provides time-stamped prediction markets data that can reveal early or unexplained probability changes. Analysts can monitor these movements and compare them with public event timelines. This supports anomaly detection and signal interpretation. The API enables systematic analysis of potential inside-information effects across prediction markets.