A Polymarket trader's massive purchase of Trump's “win” contract pushed the odds up to 99% at one point

On Oct. 25, CoinDesk reported that a trader on Polymarket briefly mispriced the market for the 2024 U.S. presidential election by purchasing a large number of Trump “win” contracts. The trader spent more than $3 million on 4.5 million contracts in a short period of time, at one point pushing the probability of a Trump victory to 99%, much higher than the 63% given by the actual market at the time.

This pricing anomaly was due to Polymarket's on-chain order book mechanism. In one $275,000 order, the trader traded at 99% odds, while other orders were filled at 65.9 cents and 62.7 cents, respectively.Polymarket's dynamic order book adjusts prices with each trade, which makes it possible for large trades to lead to severe slippage, temporarily distorting the actual odds.

As of today, Trump has a 63% chance of winning the election on Polymarket, while Kamala Harris has a 36% chance of winning. The market has accumulated more than $2.2 billion in trading volume, making it the most traded market on the platform.