After news emerged that Nvidia CEO Jensen Huang resigned due to reports of three extramarital affairs, related Polymarket prediction markets reacted quickly. The reports said that two of the affairs involved company employees, and another involved an executive at Megaspeed, and whether that executive is a Chinese spy remains undetermined.
An analysis used the Polymarket API to try to understand more precisely the speed of prediction market reactions under this kind of news.
On Polymarket, the contract predicting whether Jensen Huang would resign or be fired before December 31 reacted quickly to the second report of an extramarital affair and to news that Nvidia's board was considering removing him.
Second-by-second data showed that the market began fluctuating just seconds after the relevant New York Times article was published; and after the Wall Street Journal article suggesting Huang might be removed was published, the market reaction was even faster.
This difference may simply stem from timestamp precision: the timestamps of both articles were only accurate to the minute, while both markets moved within two minutes.
About 31 seconds after Nvidia's press release about the CEO transition was published on GlobeNewswire, the market predicting whether Jensen Huang would resign or be removed before November 12 had almost fully digested the news, with the trading price rising above 90%. In less than a minute, the market had approached its maximum value.
Traders also participated in the market predicting whether a third extramarital affair would be disclosed.
That market moved almost in sync with the time when X platform accounts began reposting the news wire copy.
Before Reuters had even published the relevant report on its website, the market had already almost fully reacted.
In all these cases, these markets quickly incorporated the information in the reports into the pricing of binary options.
