building a proprietary trading firm native to prediction markets
nyc / bcn
Joined February 2017
- Tweets3.8K
- Following534
- Followers8.8K
- Likes12.4K
I met Jesús studying engineering at university. His grades were great, but what fascinated me was the size of the tutoring business he'd built on the side. We clicked right away over a shared hunger and ambition.
He got where he is with no shortcuts. From a small town in Toledo to finishing at the top of everything he did. He won the national "la Caixa" scholarship and went straight to Stanford.
More than four years later, I'm grateful to call outliers like Jesús, Daniel, Cristian and Luis friends, and that they let us be part of Harbor's oversubscribed $10M seed round.
Congratulations to the whole Harbor team.
AI needs clear liability.
Today, @harborai_ comes out of stealth with a $10M seed round led by @Base10Partners, @AbstractVC and @8vc.
@elechi_v0, Cristian, Luis and I started @harborai_ with one mission: to insure the agentic economy.
Rather than pacing the frontier, we believe the solution lies in pushing this frontier with real skin in the game.
In Arthur Conan Doyle's 1892 story Silver Blaze, a champion racehorse disappears overnight and its trainer is found dead. The inspector chases strangers and suspects. Holmes points to something else: "the curious incident of the dog in the night-time."
The inspector is confused. The dog did nothing in the night-time.
"That was the curious incident" Holmes replies.
The stable's watchdog never barked, so the intruder had to be someone it knew. That one missing sound told Holmes it was an inside job, carried out by the horse's own trainer. Everyone else was looking for what happened. Holmes solved it by noticing what didn't.
So when a market feels boring or quiet, don't tune out.
That's when the dog isn't barking, spotting it takes a different kind of attention.
Enabling joint probabilities in prediction markets, each with YES/NO and AND/OR options, leads to an exploding number of markets, most of which would have little liquidity.
Liquidity can be provided on all combinations of YES/NO and AND/OR between any two markets by quoting only 1 additional market: a covariance market.
camilo retweeted
Introducing Statebook: Markets for All States of the World.
For the past few months, I’ve been exploring a simple market-design question:
What becomes possible if we start with the exposure someone needs, rather than the contract an exchange happens to list?
This question is becoming increasingly relevant as @HyperliquidX, @Kalshi, @Polymarket, and vertically specialized exchanges such as @Architect_Fi expand the universe of tradable underliers, and the boundaries between perpetuals, options, and event contracts begin to blur.
My answer: structured-product heaven.
The working paper and interactive research interface are below.
Thank you to @0xsmac, @0xfishylosopher, and Chris Saunders for reviewing and contributing to the initial draft.
statebook.app
the other side of the unbundle: cleaner price discovery on the equity itself. each KPI that trades separately is one less unknown priced into the stock. strip out enough factors and what’s left is a sharper read on intrinsic value instead of an inference from the bundle. frontier markets supercycle.
I truly, honestly believe that Company KPIs event contracts, at scale, will be isomorphic to the Craigslist Unbundling moment that P2P marketplaces experienced in their current format 2000s for companies who want exposure or coverage for a specific company risk
a stock is a bundle of every line a company reports plus everything the market feels about it, and until now that bundle was the only thing you could buy if you cared about one line.
a KPI contract is the first instrument where you hold the line without the bundle
and the people who care about one line
for anyone wanting to trade it, great to go long/short. can pack flow around it (which is where the wholesale part kicks in). speciality lenders can even go long/short if they’re underwriting a specific form of credit risk where the KPI has narrow basis compared to stock.
very excited to solve for this.
camilo retweeted
Inside the Billionaire Backed Prediction Markets Hedge Fund. Run by a 24-Year-Old.
Camilo Saravia (@curiouscamilo), founder of BlueWalker Capital, a systematic prediction markets fund backed by Daniel Howard of Halo Capital.
"I don't want more capital. I'm extremely long our equity."
We cover:
- Why insider trading in prediction markets is terrible for liquidity and GOOD for society
- Prediction markets as cash-backed truth in a world of AI slop and disinformation
- Why he turned down the allocator question entirely, and the "Goldilocks zone" that makes a fund this size work
- His research team's actual mission statement: "collapse the entropy of the internet into signal"
- Trading Spotify streams and measuring how fast Mamdani viralizes vs Cuomo on TikTok
- Why beating earnings has almost no correlation with the stock going up, and why only testing reveals that
- Mention markets as literal next-word prediction, and how makers got sniped out
- Hiring missionaries with a mercenary work style, and why every hire takes a pay cut vs Citadel, Jane Street, Wintermute
- Daniel Howard's mandate: faster, more risk, more aggression. "They haven't backed me to print 7% APY"
- The abundance mindset, from a kid with immigrant parents sitting across from generational wealth
- A venture mindset applied to public equities: pulling the thread from free cash flow down to Glassdoor culture
- Why you never need to be binarily right: buy at 20, sell at 40, never wait for resolution
Highlights:
(00:00) Intro
(00:56) Taker vs maker, reflexive vs proactive: the strategy map
(03:08) What makes an event contract different from an equity
(04:53) Insider trading in prediction markets: bug or feature
(08:18) Cash-backed truth in a world of AI slop
(12:43) Where edge actually comes from
(14:19) The dataset: billions of records a day
(17:44) Building a money management business from an empty office
(21:34) Why asset management competes with software as a business model
(23:51) How to underwrite elite talent
(25:50) Missionaries vs mercenaries, and why the tension is the point
(30:54) Recruiting against Citadel money (and losing on salary every time)
(37:32) "We can't compromise speed": the Daniel Howard mandate
(44:45) The abundance mindset
(48:28) "Why should I invest?" / "I don't want more capital"
(50:12) Collapsing the entropy of the internet
(51:04) Spotify streams, TikTok virality, and mention markets
(53:17) The one data provider he'd long if he could
(55:49) There's a business behind everything
(01:00:07) How to find the real drivers in any market
(01:04:04) A venture mindset applied to public equities
(01:10:06) Prediction markets 101: where to actually start
(01:12:05) Why you don't need to be binarily right
(01:13:19) Final question: building personal edge against the models
The Mathematical Company has been acquired by BlueWalker Capital.
Jesús Remón founded the company less than a year ago and built agentic trading systems across prediction markets, equities, and crypto that accelerate alpha research and engineering.
I still remember how impressed I was reading his Shannon entropy framework for prediction markets and his Jacobi vs. Logit jump-diffusion comparison when we first invested in the company.
Today their tech plugs directly into BlueWalker's systems and capital.
Welcome to the team Jesús!
@TheCreatorAbove @mathematicalco
public equity markets autistically obsesses over quarterly income statements and venture investors are exceptionally good at underwriting operational signals. i've learned to do both. trading public equities with a venture mindset is one way to unlock venture returns in liquid markets, AMD just validated the thesis again. Congrats to all holders!!
camilo retweeted
Three years ago, I joined @curiouscamilo in building a portfolio from scratch: angel checks, secondaries, listed equities, private credit, SPVs, joint ventures with US funds.
We compounded at above 20% IRR. $15m non-custodial AUM.
It wasn't enough for Camilo.
His thesis: "Equities and SPVs are not defensible. We don't have Buffett's, Hummingbird's, or Sequoia's brand. We need to build a tangible moat that defends and expands our returns."
So he looked elsewhere.
He saw prediction markets before anyone knew what @Polymarket was — when volumes were flat.
He dropped out of school to front-run the trend, partnering up with investors from Hummingbird.
Prediction market volumes grew 10x the following year.
His intuition is unmatched.
Today, @halo__xyz — the venture fund associated with Brevan Howard, one of the most renowned hedge funds in the world — acquired a stake in BlueWalker Capital to accelerate its systematic infrastructure buildout. The buildout of a true moat.
Camilo has never stepped onto a trading floor. He's not a quant or a banker.
He's the rare kind of entrepreneur with the intellectual capacity and relentless energy to obliterate whatever obstacle stands between him and victory.
Keep winning, brother.
BlueWalker Capital has raised one million dollars to scale its systematic trading operations in prediction markets, adding @dhoward’s @halo__xyz and @woutergort of Hummingbird Ventures as shareholders.
We are using these funds to strengthen our infrastructure and scale our engineering, research and operations teams.
We trade algorithmically using our own balance sheet and shareholder capital, with the capacity to rotate hundreds of thousands of euros in daily volume.
Join us on our mission to become the leading hedge fund in this emerging asset class, delivering investment returns while making prediction markets efficient as the world's most accurate source of truth.
elperiodico.com/es/economia/…
camilo retweeted
Extremely proud and excited to be working with Camilo to run trading strategies and market make prediction markets
BlueWalker Capital has raised one million dollars to scale its systematic trading operations in prediction markets, adding @dhoward’s @halo__xyz and @woutergort of Hummingbird Ventures as shareholders.
We are using these funds to strengthen our infrastructure and scale our engineering, research and operations teams.
We trade algorithmically using our own balance sheet and shareholder capital, with the capacity to rotate hundreds of thousands of euros in daily volume.
Join us on our mission to become the leading hedge fund in this emerging asset class, delivering investment returns while making prediction markets efficient as the world's most accurate source of truth.
elperiodico.com/es/economia/…
BlueWalker Capital has raised one million dollars to scale its systematic trading operations in prediction markets, adding @dhoward’s @halo__xyz and @woutergort of Hummingbird Ventures as shareholders.
We are using these funds to strengthen our infrastructure and scale our engineering, research and operations teams.
We trade algorithmically using our own balance sheet and shareholder capital, with the capacity to rotate hundreds of thousands of euros in daily volume.
Join us on our mission to become the leading hedge fund in this emerging asset class, delivering investment returns while making prediction markets efficient as the world's most accurate source of truth.
elperiodico.com/es/economia/…
camilo retweeted
La barcelonesa BlueWalker Capital capta 1 millón de dólares del hijo del billonario inglés Alan Howard y del inversor Wouter Gort elperiodico.com/es/economia/…
Prediction markets create a public good: probabilistic truth. Someone has to pay for public goods.
Until now, that's been venture dollars and brave market makers subsidizing liquidity to bootstrap these markets.
Today marks an inflection point.
Polymarket has crossed the threshold where any actor willing to pay for the price discovery of probabilistic truth can now bootstrap a market themselves.
No VC required, no professional market maker needed.
Whenever probabilistic truth is needed, a market for it will survive on organic demand alone.
Volumes, accuracy, and adoption will now increase at a steeper pace.
Polymarket has become permanent infrastructure.
now say it with me: raise capex, market vomits, few quarters down the line capex ROI is exceptional, improvements are reflected in the income statement, market reacts to the upside, repeat.
People criticize @chamath so much.
This is a stellar memo. He’s an extremely sharp and talented investor.
Like Hummingbird, FF, and others, he proves right again that venture is an asset class of people:
“Special person: Yes”
“It’s a team bet”
Taken Sep 1, 2016 when @JonathanRoss321 convinced me we could take on the giants, build new silicon and that AI was coming. In typical SV fashion, we didn’t even have a company yet - just a term sheet from me to invest and the three of us. I spent the next month recruiting as many of the TPU team from Google Wisconsin as I could. “Welcome to chips”, I thought.
The company, as with all important companies, went through its own trials and tribulations including promoting Jonathan from CTO to CEO and the inevitable falling out and repair of his and my relationship. Anyways, it all happened for a reason.
Today we close this almost decade chapter and Jonathan starts a new one with nVidia.
I can’t thank him enough.
Sometimes it’s simply better to be lucky than good and be fortunate enough to work with great people and follow them into battle. That is me here.
Jonathan was not only the father of TPU when he was at Google but he is a technical genius of biblical proportions. He also assembled a great team with folks like @sundeep and @GavinSherry to back him up. They will also do incredible things at nvidia.
Separately, whenever something I’m involved in either crashes or wins, I reread my thoughts when I first did it. Was it luck? Was it skill? What did I learn? What do I do now?
YMMV, but I am attaching the original investment memo I wrote a decade ago.
I’ll do a more substantive view on why this deal matters and what my guess is about the future of AI silicon from here on an upcoming episode of the pod.
In the meantime, Merry Christmas. I am very thankful. So thank you Jonathan, Sunny, Gavin and the entire Groq team. 🙏🏽🙏🏽🙏🏽
Why not just quit ? Chuck it all. Sell the business. Take the money and run. Play it conservatively. Relax a little.
Real entrepreneurs never do, though, and I haven't either.
Generally, real builders are so focused, one-dimensional, and dedicated. They'd have a nervous breakdown after two weeks of sitting around. Their challenge, even their reason for living, would be gone. Why would I swap fun, influence, challenge, and more money than you could ever spend for only a multiple of more money than you can ever spend?
I can't think of anything better than my current situation. Should I take the company public and have to answer to more partners, stockholders, and security analysts? Why would we want to do that?
We're going in the other direction. We've already bought back Merrill's 30% investment in our company. The first 10% we bought back for $200 million in 1996. And the second 20%, we bought back for $4.5 billion in 2008. Not a bad return on their original investment of $39 million.
Sell? No thanks.
Answering to no one is the ultimate situation. So back on the treadmill, I go. Ratchet up the risk, enter a new medium, start another project. Improve, develop, expand, go for it. – Michael Bloomberg
