u/sarhama072 ·
Reddit — r/wallstreetbets
· May 09, 2026 at 21:39
· ⬆ 21 pts
· 💬 25 comments
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AI Summary
Summary
The author claims to have found a guaranteed 9% arbitrage by combining a QQQ put debit spread ($621/$620) with a prediction market bet that the Nasdaq 100 will end the year positive.
The thesis is that the implied probability from options (delta of ~0.81) is mispriced relative to the prediction market probability (0.71), allowing a risk-free profit.
Quality assessment: Speculative noise – the analysis relies on illiquid prediction markets, ignores execution costs, and lacks verification of real-time pricing. The post is not well-researched DD.
Score21
Comments25
Upvote %82%
▶ Full Post Text
I was sifting thru prediction markets and checking the math on everything, and I think i found a free 9%.
The probability of nasdaq 100 finishing positive is 71%.
The nasdaq 100 at year beginning was 25249
The qqq equivalency is 620
In translation, that's the same thing as saying:
The price of a QQQ $619/$620 call debit spread is supposed to be .71, or the delta being 71
Its not. The debit spread is priced at .81, delta being 81
To take advantage of this, you can buy a put debit spread from $621/$620 which is priced around .20 or -20 delta
And then pair it with a bet on nasdaq ending up positive by end of year at .71 a contract, or 71 delta
With this hedge, you take advantage of the overpricing on the short side of prediction markets.
If you carry the trade out, you get 1.0 on either side, and you're only paying. 91 for it
You carry this through, you're guaranteed 9% return
QQQ $621/$620 put debit spread priced at ~0.20; prediction market on Nasdaq positive year-end at 0.71. Combined payoff = 1.0 for cost of 0.91. Mispricing between option delta and prediction market probability creates a synthetic risk-free position. Execute the put debit spread and prediction market bet simultaneously to lock in a 9% return by year-end. Prediction market counterparty risk, options slippage, early assignment, liquidity constraints, and assumption that deltas equate to probabilities.