An Interview with Adanthar

Adanthar, a professional poker player and Intrader was kind enough to grant me this interview about his thoughts on Intrade. Here is the interview.

The Daily Chuck: How long have you been playing poker online professionally?

Adanthar: Give or take 5 years

The Daily Chuck: What stakes do you currently play?

Adanthar: I don't play much now and when I do it's typically razz/stud 8 (no real reason, I'm just lazy), but I mostly played Multi Table Tournaments (all stakes) and Medium Stakes No Limit ($2/$4 - $5/$10)*

The Daily Chuck: How long have you been playing at that level?

Adanthar: Several years - I've never needed to step down but don't like playing too high.

The Daily Chuck: So what got you involved with Intrade?

Adanthar: Initially, I actually got involved through a politics forum thread. The idea that any given market was a perfect/optimized entity that could not be beaten always seemed laughable to me, and when several people suggested I put my money where my mouth is, I decided to take a few weeks and see how far I could run with it.

It very quickly became clear that Intrade was not just beatable, but that I probably had a better hourly rate spent actively trading than playing MSNL, so I never looked back.

The Daily Chuck: When were you most actively trading?

Adanthar: The best opportunities always happen when there's a lot of active volume, so I was most busy on any given primary night.

The Daily Chuck: How much money are we talking about? Was this all your money?

Adanthar: I started with $12,750 or so (10K on Intrade; I also had some money on WSEX's poker site and moved it to Matchbook, which had political contracts). The first 10K arrived shortly after the Iowa primaries and I moved the rest in mid-January.

On November 3, 2008, I had control over a number in the low six figures, about half of it mine. I've since moved the vast majority of it back out but am obviously satisfied both with my earnings and the outcome of the bet.

The Daily Chuck: Are you still currently trading? What contracts are you trading at the moment?

Adanthar: I left a small fraction of my former bankroll online and have a 25% ROI (Return On Investment) this year, but haven't been very active. My last major trade was being on the right side of the auto bailout contract in January, and I've had some other minor hits/misses in the last six months.

The Daily Chuck: How successful have you been on Intrade?

Adanthar: My overall ROI is greater than 400%.

The Daily Chuck: When dealing with politics almost everyone has a particular political party or candidate that they favor over another. What political party or candidates do you favor, how do you think this affects your decision making and what do you do, to try and separate what you want to happen from what you think will happen?

Adanthar: 90% of what I do is looking at statistical trends vs. human psychology. This is no different on Intrade than it is on a poker table. From looking at various forums (2+2, Intrade's own forums, FreeRepublic, DailyKos, etc.) I had realized that the vast majority of diehard political partisans (i.e. the people most likely to have money on Intrade) tend to support their preferred party's or philosophy's position on absolutely every issue and surround themselves with others who think the same way, which ultimately makes them unable to consider alternative viewpoints and, crucially, also makes them unable to accurately estimate voting patterns.

To put it another way, the same people that bet on the politician they want to win without regarding the likelihood of that actually happening are also the people that give their opponents proper odds to draw and then tell each other bad beat stories when the other guy gets there, reinforcing their biases in the process.

Personally, although I am a moderate Democrat, I am first and foremost concerned with hard data. My picks were not guided by whom I personally hoped or even thought would win except in the abstract - I was primarily concerned with where I thought the market would go next and, to a lesser extent, poll accuracy. Ultimately, while I thought Obama was a large favorite for the entire general election cycle, I was much more interested in where the blue line was compared to the red line on any given day and how I could profit off the likely movement over the next week or less. For example, I realized that Obama's stock would move up if he won the Wisconsin primary, even though, looking at the polls, his win was a foregone conclusion, so I held onto my Obama contracts until after that primary.

The Daily Chuck: Do you only trade political contracts?

Adanthar: I trade all contracts that involve multiple decision points. Most of the time, I stay away from decisions that are made by one person (Supreme Court nominations) since they are harder to handicap, but do follow all contracts that are determined by an election, a business success/failure, etc. that have multiple public variables.

The Daily Chuck: Do you think the prices on Intrade accurately reflect the true odds?

Adanthar: Not even close.

The Daily Chuck: Why do you think that is?

Adanthar: It's an inefficient, extremely beatable market and will pretty much remain so forever, just like every other market that is significantly influenced by human psychology (at this time, all of them.) While it's true that Intrade is smaller and thus more susceptible to a handful of individual traders' biases, the same effect applies to all markets; for example, the very obvious oil bubble and its deflation were brought on by speculation much more than any actual real-world demand for oil. Because markets are fueled by speculation, it should not be a surprise that humans, who are fundamentally irrational in many of their decisions, also often all speculate in one direction and force the price of an object away from its actual 'true' value.

The Daily Chuck: What type of contracts have you found to be the most exploitable?

Adanthar: Anything that ends quickly can be exploited simply because of the ability to leverage small wins.

The Daily Chuck: What's your biggest loss and win?

Adanthar: I think it's something like -$2500/+$11K in a night, respectively. It's hard to say for sure because I'd often trade several positions a day.

The Daily Chuck: What would be your biggest piece of advice for someone like me, looking to become a more successful trader?

Adanthar: In general, you simply have to learn to separate what you want to happen from what you think will happen. There are a few good books for this - I wholly recommend Fooled by Randomness in particular.

*($2/$4 – $5/$10) represents the small blind and big blind required to play at a poker table at Medium Stakes, the typical buy-in is 100x the Big Blind