Why Positions Must Be Time-Boxed
Prediction markets are fundamentally different from perpetual assets like BTC or ETH. They have two properties that make open-ended leverage dangerous:Time Decay
As resolution approaches, liquidity often deteriorates and volatility increases. A position that’s safe today might become unliquidatable tomorrow, not because the probability changed, but because time ran out.Binary Resolution
At the moment of resolution, prices snap to 0% or 100%. There’s no gradual price movement to liquidate against. This is gap risk.| Phase | What Happens | Your Exposure |
|---|---|---|
| Trading Window | Open, close, and manage positions freely | ✓ Active |
| Close Date | All positions auto-close at market price | ✓ Exiting |
| Resolution | Event outcome determined, prices gap to 0% or 100% | ✗ None |
Time-boxing solves both problems. By closing all positions before resolution, we exit while markets are still liquid and prices are still continuous.
How Close Dates Are Set
Each market’s close date is set when we list it, based on the event’s characteristics:| Event Type | Typical Close Window | Example |
|---|---|---|
| FOMC meetings | Hours before announcement | Close at 12 PM ET, decision at 2 PM ET |
| Elections | Days before results certified | Close election night, before counting ends |
| Sports | At event start | Close at kickoff |
| Earnings | Before market close on announcement day | Close at 3 PM ET for after-hours release |
The close date is always visible before you open a position. It cannot change after listing.
What Happens at Close
When a market reaches its close date:This happens automatically. You don’t need to take any action. If you want to exit earlier, you can close manually at any time.
The Tradeoff
Time-boxing means you can’t hold a position through resolution. You’re trading probability movements, not betting on outcomes.The Mental Shift
For some traders, this is a limitation. For the system as a whole, it’s what makes leverage safe.