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PredictIt Review

PredictIt is an academic project conducted by Victoria University of Wellington in New Zealand. Its traders use real money on its prediction markets. PredictIt’s markets are exclusively for U.S. election events. PredictIt has an agreement with the CFTC. With some trading limits to reduce the platform’s profitability, the CFTC allows PredictIt to offer real money election markets in violation of the CFTC’s rules.
PredictIt was launched in 2014 and remains one of the only real-money prediction market platforms that offers markets on elections under U.S. regulations.
Here are the most important things you need to know about trading on PredictIt, and why it’s on of the best prediction markets for betting on politics.

What is PredictIt?

PredictIt is a prediction market company run by a university. It was founded as a way to gather data from prediction markets to study politics, markets, computer science, market psychology, and many other subjects.
That doesn’t change anything for traders. If you want to trade on PredictIt, you just have to create an account, fund it, and begin trading. PredictIt was just founded to study the markets you’re trading in instead of to fulfill a market need.
PredictIt only offers U.S. election markets. Its markets include presidential, House, and Senate races. You’ll also find markets on events like whether Biden will resign before November or what the electoral college margin will be.

How does PredictIt work?

PredictIt is largely like any other prediction market platform. Customers can sign up and trade contracts based on how likely they believe different electoral outcomes are.
However, PredictIt has trader limits. PredictIt caps individual investment at $850 per market. Up to 5,000 traders can invest in a market at any time. The CFTC allows PredictIt to offer election markets because of those limits.
PredictIt is built for individual traders, not the institutional money that powers large exchanges. The platform couldn’t claim to be an academic project if financial firms were making millions trading on election futures. With limited profitability, PredictIt can maintain its claim to being research-focused without abusing CFTC technicalities.

What benefits does PredictIt offer it's traders?

PredictIt offers a safe platform with credible data security and reliable USD payouts, which is more than unregulated prediction market platforms can say for themselves.
PredictIt’s no-action letter may allow it to break certain CFTC rules about election markets. But those are the only regulations that the CFTC won’t punish PredictIt for ignoring. PredictIt is still required to monitor its markets to prevent market manipulation. It still has to offer clear conditions for market resolutions so traders know what will determine their wins or losses.
The platform is under increased scrutiny after the CFTC tried to withdraw its no-action letter in August 2022. The Victoria University of Wellington claims that it hasn’t profited from PredictIt and has only covered operational expenses. As PredictIt and the CFTC continue their legal battles, PredictIt can be expected to maintain its market standards to avoid violating another CFTC rule.

How to register and trade on PredictIt

Step 1

Signing up for PredictIt can be an involved process. It begins simply enough. You’ll create your login credentials and create a separate username. Then you’ll enter your birthday and address. However, the identity verification process can be involved.

Step 2

If your ID matches your address, then you can verify your identity with a selfie. If not, then you’ll have to upload a government ID and wait for PredictIt to verify your identity that way. It only took me a day or two for my identity to be confirmed with my driver’s license.

Once you’ve created your account, you can fund it with a debit or credit card. Click on the empty “cash” heading in the top right corner of the screen. You’ll be taken to a screen where you can enter your card information and complete your first deposit.

Step 3

After you’ve completed your deposit, you can browse PredictIt’s markets. Select a market, then decide how many contracts you’d like to buy. However, PredictIt doesn’t force you to accept to the price on offer. You can lower the purchase price to see if another user will accept your new offer. Until your offer is accepted, your money will remain in your account. Your money doesn’t move until your trade is executed.
If you offer a new price, then you’ll have to wait to see whether another trader buys it. You may wait for a long time depending on how much lower your offered price is. Buying the contract at market value will allow you to execute your trade immediately. As long as there’s available space in the market, your trade will go through.
You can view the markets you’ve invested in in the “dashboard” section. There you’ll find your investment, its maximum payout, and your gain or loss. If the price hasn’t moved, then there will be no chance in the gain section. PredictIt makes it easy to track all your investments in real time, even if market limits create hiccups in the trading process.

How to User PredictIt Safely

PredictIt is a legitimate company with over 10 years of experience serving traders. By choosing PredictIt, traders have already made an important safety decision. However, there are a few things that traders can do to protect themselves on PredictIt.
There are some obvious digital safety steps, like not sharing your login or financial information with anyone else. Shared accounts ask for misunderstandings about which trades to place and how much money to spend.
Finally, have a plan for what you’re investing in. Futures contracts are among the most volatile financial instruments available. Don’t spend more than you can afford to lose, and don’t chase losses if your election contracts don’t pay out.

PredictIt fees

PredictIt has three fees, but most traders will only encounter two of them. The first is a 10% fee on profits. Second is a five percent fee on withdrawals. That five percent is on top of any fees for your chosen withdrawal method, so choose wisely.
The third fee is an inactive account fee. If your account is inactive for at least 12 months, then PredictIt will charge a $2 fee each month until your account is empty. This won’t matter for active traders. If you finish with PredictIt, then withdraw all your funds to avoid having them chipped away.

How to deposit and withdrawal on PredictIt

PredictIt allows traders to make deposits with their credit cards. Traders can click the “cash” header in the top-right corner of the screen. If they navigate from PredictIt, traders will get a pop-up message that will encourage another deposit.
Traders can withdraw through ACH transfers or checks. You’re responsible for any bank fees incurred on top of PredictIt’s 10% take of your profits and five percent withdrawal fees. PredictIt’s withdrawal fees cover the university’s operating costs for running the platform.

Is PredictIt legit?

Yes. PredictIt is overseen by the CFTC and is legally available to U.S. traders. It operates under a no-action letter from the CFTC in which the CFTC allows PredictIt to offer election markets as long as it limits its potential as a profitable platform.
PredictIt uses real market participants to study how prediction markets work and what makes them accurate. The platform also makes its data available to many researchers with diverse areas of interest. Researchers from computer scientists to game theorists draw on PredictIt’s data for research.
The company has also been active for over a decade. During that time, it has paid winnings fairly. The CFTC’s attempt to repeal its no-action letter was because of alleged overpayments, not underpayments.
PredictIt is a legitimate research and prediction market company that any U.S. trader should feel comfortable using.
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