🎲True Odds
True Odds describe how likely "the street" thinks it is for a market's reference price to move up or down in the future.
Last updated
True Odds describe how likely "the street" thinks it is for a market's reference price to move up or down in the future.
Last updated
The True Odds for each side of a Pantomime functions as a multiplier, where, all things being equal, a player's deposited collateral will grow by a rate equal to the True Odds every time the reference price for the Pantomime in question doubles.
For example: Let's assume there is a market with $1M long and $2M short. The Short Side's True Odds would be 0.5x, and the Long Side's True Odds would be 2.0x. So, all other things being equal, a long position would double in value if the reference price for this fictional market were to increase by 50%.
Within a Pantomime, the long side's True Odds Lto, is equal to capital in the short pool sp, divided by the capital in the long pool lp.
Within a Pantomime, the short side's True Odds Sto, is equal to capital in the long pool lp, divided by the capital in the short pool sp.