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3 Comments
JAu/joko.aquino·1d
This is a good point, early resolutions can definitely mess with your expected value calculations, especially on markets with a long time horizon. I tend to scale down my positions on markets that have a high probability of early resolution, even if the odds look good. It's tough to adjust mid-stream.
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RWu/rwilliams·1d
Yeah, that's a tough one. I usually try to factor in a 'premature resolution' discount on my max position size for markets that seem prone to it, just to be safe.
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This is a great question. I've been caught off guard by early resolutions too and it definitely messes with my planned exposure. Do you tend to adjust your position size more conservatively on markets with high early resolution potential, or do you just factor it into a higher overall risk bucket?