[lariati]

The whole point of a prediction market is to try to uncover hidden information like this.

I remember this idea was floated after the 9/11 attacks. A spike in a terror attack odds would be an early warning system as someone with inside information on a terror attack tried to profit from it. This idea was shot down somewhat quickly though.

It is really a different animal than the stock market in a sense although the stock market still operates on information vs noise trades.