There are four sources of profit on this venue. Every approach that sounds novel decomposes into one or a combination of them. Knowing which one you are on matters more than any technique, because the four differ completely in cost structure, capacity ceiling, and how they fail.
| Path | You earn | You pay | You need |
|---|---|---|---|
| ① Directional | the amount by which your estimate beats the market | fee plus spread | information or judgement |
| ② Market making | spread plus the maker rebate | adverse selection | screen time, fast cancels, inventory control |
| ③ Structural arbitrage | the gap between two prices for the same risk | fees on every leg, plus unpaired risk | speed |
| ④ Platform subsidy | the subsidy | the trading costs incurred to earn it | volume |
They can be stacked — making markets while collecting rebates, or accumulating a tier while trading directionally. But stacking does not change the nature of the primary path: if ① is negative, ④ does not fix it (see §5).
You think something has a 70% chance and the market quotes 0.62; you buy, and you are earning those 8 percentage points.
It is the only one of the four with no structural ceiling: if you genuinely are more accurate, capital can keep scaling until your orders start moving the price. It is also the only one nobody can verify for you — hence the easiest to be wrong about.
How to know whether you really are accurate? Build a calibration table: write down your probability before each bet, then after a few dozen, bucket by your estimate and compare against outcomes. That measure cannot be faked — method in price is probability.
Quote both sides, earn the spread, collect a rebate on fills, and pay no fee to post. It sounds free.
But posters do not pay a fee; they pay adverse selection — when you are hit, the taker usually knows something you do not. And that cost varies violently with tenor:
| Income | Cost | Net | |
|---|---|---|---|
| Hourly board | +0.248¢/share | −0.475¢/share | +0.099¢, barely positive |
| Five-minute board | +0.25¢/share | ≈ −7.2¢/share | an order of magnitude short |
Same action, same rebate, and changing the tenor takes it from barely positive to deeply negative. See adverse selection.
The cleanest of the four: a full set of outcome tokens is always worth $1, so assembling one for less than $1 yields a certain difference. No judgement of any kind required.
Which is exactly the problem — opportunities requiring no judgement are the first to be automated. I censused the lane: live executable inventory was zero.
You see the two sides summing to 0.96 with four cents sitting there — but those four cents usually live in the band you cannot buy: quoted, with a few dozen shares behind it, or unfillable entirely.
And every leg pays a fee, which on multi-outcome boards means N fees. Once you account for those, the paper opportunity is generally gone. See complementary sets and walking the book.
The four rebate schemes have entirely different rules, pools and payout times, and conflating them is the commonest error (the distinction is here). This section is only about subsidy as a path.
In other words: fully maxed, subsidies only move the required gross edge from about 1.75pp to about 1.5pp.
I built a line whose case for profitability leaned heavily on subsidies. Result: about 41 hours, roughly 496 windows, net −$496.51, and rebates received of $0.
And even if they had arrived it would not have saved it — that line's shortfall was over a percentage point and subsidies cover at most 0.3pp: an order of magnitude apart. Full ledger in the autopsy.
Subsidies make a positive strategy better and cannot rescue a negative one.
| If you have | Take | First confirm |
|---|---|---|
| genuine domain knowledge | ① directional | build a calibration table and verify you really are sharper |
| screen time and engineering | ② market making | check whether the category's population median is positive |
| low-latency infrastructure | ③ arbitrage | check whether any inventory remains — usually none |
| only capital and volume | ④ subsidy | it is not a path on its own, only an addition to another |
The last row is this entry's main point: ④ cannot stand alone. Trading in order to collect a subsidy always pays out more in fees than it returns (even the top tier returns only 50%). It only makes sense attached to a path that is already positive.
Ask yourself which one you are on: I am sharper than the market (①), I provide liquidity (②), I capture a price inconsistency (③), or I collect a subsidy (④). An approach that cannot answer is usually ④ dressed up as ①.