When I see a big market with lots of movement, I quite often place lots of small limit orders above and below the current probability, so that if the market wiggles, I make a small profit. For example, if the market is at 50%, I place an order at 49% for 49 mana, one at 51% for 49 mana, and if they are both filled, they cancel out and I ended up spending 98 mana for a 100 mana payout.
If it goes to plan, this is obviously good for me. Free mana! Sometimes it doesn't go to plan, and the market just goes in one direction and stays there, which means I bought a load of mana in the wrong direction which never gets cancelled out. That's obviously bad for me. (The whole thing also takes quite a bit of time to place and replenish the limit orders, so it's not exactly free mana for a few reasons...)
This poll isn't asking about whether it's good or bad for me, but whether it's unethical, or bad for the community, or selfish, or something along those lines.
Arguments for unethical:
I profit without contributing to making the prediction more accurate.
I act as a parasite on other people wiggling the market.
Arguments for ethical:
I make the market more liquid, in that if somebody wants to make a big bet, they won't move the market so much; they bet (against me) at a more favourable rate than they would have had otherwise
This is good for those who want to make big bets because they get a better rate.
It is also good for the community because a less wiggly market is a more useful way of seeing overall trends.
Feel free to make further arguments in the comments.
I don't see any reason why this would be unethical. I know that all relevant crypto markets have people doing this, which helps a market rather than harms it.
I have a question: what is the point behind "trading" or optimizing for these profits on Manifold? Someone who does this does not predict the future meaningfully and makes profits based on common trading tactics.
@Soli it's a good question and I think you've answered it. I want to win mana by any means. This includes making correct predictions, but it also includes things like this. Another thing I'd put in this category would be driving down end of year markets. It's not really a "prediction" to say that there won't be a UK general election this year, but you can make mana by betting it down.