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Conviction & Conviction-Limited Exposure

The Formula

For a user placing a bet of size SS, their conviction-limited exposure for outcome XX is:

Smax(X)=S×Belief(X)max⁡(Belief vector)S_{max}(X) = S \times \frac{\text{Belief}(X)}{\max(\text{Belief vector})}

Where:

  • Belief(X)\text{Belief}(X) is the probability you assign to outcome X
  • max⁡(Belief vector)\max(\text{Belief vector}) is the highest probability among all outcomes

What This Means

Most Confident Outcome

If the market resolves on the outcome you had the most conviction in (highest belief %), your full bet size SS is matched.

Less Favored Outcomes

If it resolves on a less-favored outcome, you're only matched up to the conviction ratio. You never risk more on an outcome than your stated belief justifies.

Visual Examples

Binary Example
$300 bet with 75% belief in A, 25% in B
Bet Size: $300
Team A:75% belief → $300 max exposure (full bet)
Team B:25% belief → $100 max exposure

Calculation breakdown:

  • Team A exposure: 300×75%75%=300300 \times \frac{75\%}{75\%} = 300 (full bet)
  • Team B exposure: 300×25%75%=100300 \times \frac{25\%}{75\%} = 100
Multi-Outcome Example
$300 bet with beliefs: A=60%, B=30%, Draw=10%
Bet Size: $300
Team A:60% belief → $300 max exposure (full bet)
Team B:30% belief → $150 max exposure
Draw:10% belief → $50 max exposure

Calculation breakdown:

  • Team A exposure: 300×60%60%=300300 \times \frac{60\%}{60\%} = 300 (full bet)
  • Team B exposure: 300×30%60%=150300 \times \frac{30\%}{60\%} = 150
  • Draw exposure: 300×10%60%=50300 \times \frac{10\%}{60\%} = 50
Zero Belief Example
$500 bet with beliefs: A=0%, B=80%, Draw=20%
Bet Size: $500
Team A:0% belief → $0 max exposure
Team B:80% belief → $500 max exposure (full bet)
Draw:20% belief → $125 max exposure

One-Sided Conditional Bets

One-sided conditional bets (100% on one outcome) match full size to that outcome:

Belief vector:

[100%,0%][100\%, 0\%]

Exposure:

  • Team A: Full bet size
  • Team B: $0

Full Spectrum of Betting Options

Hyperthesis supports every type of bet you might want to place:

Traditional Market Order
Immediate execution at current price

Place a bet that executes immediately at the current market price. Just like traditional betting platforms - instant, straightforward, no waiting.

Traditional Limit Order
Execute only at your specified price or better

Set a specific price threshold and your bet only executes if the market reaches that price. Standard limit order functionality you'd expect.

One-Sided Conditional Bet
Dynamic price discovery for a single outcome

Express 100% belief in one outcome but let the algorithm find the best price. More sophisticated than a limit order - actively seeks value until you lock it.

Multi-Outcome Conditional Bet
Full belief distribution with conviction scaling

The full power of Hyperthesis - express beliefs across all outcomes, automatically route to value, scale exposure by conviction. The most sophisticated betting mechanism available.

Key Benefits

Automatic Risk Management

You can never lose more on a low-confidence outcome than your belief justifies. The algorithm automatically scales your exposure.

Express True Beliefs

You don't need to "pick a side" - express your actual probability assessment across all outcomes and let the system optimize.

Flexibility

From sophisticated multi-outcome distributions to simple one-sided conditional bets, the conviction system handles all betting styles naturally.