Large-Scale Purchase Disrupts Trump Election Odds on Polymarket

TLDR:

• A trader on Polymarket spent over $3 million buying Trump election contracts
• Due to low liquidity, some purchases hit 99% odds despite actual market odds of 63%
• Account “GCorttell93” purchased 4.5 million Trump contracts in a short period
• One $275,000 transaction experienced extreme price slippage to 99%
• The Presidential Election Winner 2024 market has seen $2.2 billion in total volume

A large-scale purchase of Trump election contracts on the cryptocurrency prediction platform Polymarket led to an unusual price distortion on Friday, when a single trader’s aggressive buying temporarily pushed the odds of a Trump victory to 99%, far above the actual market consensus of 63%.

The trader, operating under the account name “GCorttell93,” spent over $3 million purchasing more than 4.5 million Trump contracts in the “Presidential Election Winner 2024” market during a concentrated buying spree. Due to limited liquidity in the order book, a portion of the purchase – specifically a $275,000 tranche – was filled at the extreme price point of 99 cents per contract.

Market data shows that the bulk of the purchases were executed at varying price levels, with some tranches being filled at more reasonable rates. For instance, one $129,000 portion was purchased at 65.9 cents, while another $102,000 segment went through at 62.7 cents per contract.

The incident has drawn attention to how cryptocurrency prediction markets handle large trades and maintain liquidity. Polymarket operates using a blockchain-based order book system, where prices are determined by the interaction between buyers and sellers rather than being set by a central authority.

In traditional betting markets, bookmakers typically manage odds and ensure sufficient liquidity. However, on Polymarket, the price of shares directly reflects market participants’ collective assessment of an outcome’s probability. A share price of 60 cents, for example, indicates a 60% perceived likelihood of that event occurring.

The platform’s order book lists all standing buy orders (bids) and sell orders (asks) for outcome shares. Bids represent the maximum price traders are willing to pay, while asks show the minimum price at which others will sell. This system typically allows for efficient price discovery and trading.

When traders place market orders for large quantities, they may experience price slippage – the difference between expected and executed prices. This occurs because their order must work through multiple price levels in the order book to be filled completely.

The mechanics of this system became apparent during Friday’s large purchase. As the trader bought up available contracts, they had to reach higher and higher into the order book, eventually hitting extreme price levels due to the limited number of sellers.

The Presidential Election Winner 2024 market has become Polymarket’s most actively traded prediction market, with total trading volume exceeding $2.2 billion as of Friday. Current odds show Trump leading at 63%, with Democratic candidate Kamala Harris at 36%.

Other tranches of the large purchase were executed at various price points between the market rate and the peak, creating a stepped pattern of increasing prices as the order worked through the available liquidity.

The order book’s structure means that traders can see the depth of market interest at different price levels, providing transparency about where other participants are willing to trade. This differs from centralized betting platforms where brokers manage the odds internally.

Technical data from the platform shows that the price spike was brief, with the market quickly returning to previous levels once the large order was completely filled. This type of price action is common in markets with limited liquidity when faced with outsized orders.

The platform’s blockchain-based nature means all transactions are recorded permanently and publicly visible, allowing for detailed analysis of trading patterns and price movements.

Market observers noted that while such price spikes can occur in any market, they are more common in cryptocurrency-based platforms where liquidity can be thinner than in traditional betting markets.

Friday’s trading activity also highlighted how large orders can temporarily distort market prices without reflecting any change in the underlying probability of events.

The latest data shows the market has stabilized around the 63% level for Trump contracts, with regular trading volumes returning to normal levels after the large order was processed.