Welcome to the transcript of OddChain’s conversation with top Kalshi Trader Gaëtan Dugas. Here we discuss:

Let’s dive on in!

This transcript has been edited for clarity and length.

Welcome to the inaugural episode of what will eventually become the OddChain podcast. For now, we're going to be interviewing some of the top minds and traders in the prediction market space. To that end, we're very excited to welcome as our first guest, none other than Gaëtan Dugas. I really appreciate having you here, Gaëtan.

Hey, I didn't realize I was the first guest ever. What a tremendous honor.

Introduce yourself to the listeners a bit. Want to tell everybody who you are? How long you've been around in prediction markets?

My avatar, my nickname I go by online is Gaëtan Dugas. I guess, I've been doing it for a little over ten years now. I started on PredictIt back in 2015. I mostly did politics up until like 2021 or so when Polymarket started to offer more options.

I'm probably about a Top 100 trader on Kalshi right now. I've made $581,000 on Kalshi, and I've only been doing it for a little under two years on Kalshi.

And then, regarding my background, I studied finance, and I got an MBA as well. And then I keep my day job as a business analyst. It's an IT role. I'm basically telling developers what to do.

I love that. Do any of your coworkers know what the night shift gig is or do you keep that to yourself?

Yeah. Like, when I bring it up, or if we're in a meeting and I bring it up, it becomes the topic of the rest of the meeting. They're pretty fascinated by it. And then I'll send them The Washington Post articles and The New York Times and stuff like that as well.

That's so cool. It certainly makes for good water cooler stuff, I'm sure. But one of the things that I appreciate about your presence is that I think you're one of the social media figures who's really good at giving good advice to newcomers. 

You talk a lot about how to build models for markets, and about really data-backed theses for these things and how to find edge with those models. Can you go into a little bit more detail about what that actually means from a practical perspective?

Sure.

Like, if you have an edge, how do you build to get that?

Sure. So, I'll walk through Spotify as an example since it's pretty easy compared to a lot of the other ones and the data is so easily accessible.

So with Spotify, they've got their whole daily history of streams of the Top 200 for global and in every country, going back to like 2017. So, you've got access to this entire database of streams. And you can pull the data and start analyzing it, and you'll start to recognize patterns.

So, there are patterns that happen when a song is released. Friday is typically the biggest day. And then Saturday, it will drop by a certain percentage. Sunday it will drop another percentage. On Monday it usually bounces back. On Tuesday it bounces back a little more. And then from there, it does a slow decay. So you can spot that type of data. And you can look for comparable songs in the history to new ones that are coming out and kind of map out what and how you think it will do.

So, when it comes to modeling, I've got different models for different types of songs. A song like "Please, Please, Please" by Sabrina Carpenter or "we can't be friends" by Ariana Grande. Those are songs that did very well; they didn't drop very much.

And then there are songs that kind of flop, like "Aperture" by Harry Styles was a recent one where it dropped a ton.

And then there's kind of the average one.

So, basically what I do is I try and come up with a range of how songs will perform, and then once I track it a couple days, then I can get a pretty good idea of which of the categories it falls into. And based on that data, I can start projecting how it's gonna do the rest of the week.

Does that make sense as an example?

Yes, I can kind of see the spreadsheet for that too, right? You sort of slot it in. When you talk about building a model, sometimes people build more of a mental model, but it seems like for you it's very numbers-based. I imagine you sort of run these songs through the Excel sheet?

Yeah, so I'll run the numbers in Excel and get a high, medium, and low range for what the streams will be throughout the week, and then I just narrow that down as more data comes in.

So, that's a fairly simple one, but for something like Rotten Tomatoes, that's actually about six models that run at different points throughout the week because the amount of data that you get is different. So, before the social media embargo lift, all you can really find is random people rating it on Letterboxd, IMDb, or sometimes Google, or pulling reactions from Twitter. But as you get closer to release, you get more and more data. And then once reviews come in, you need to account for all the reviews that you can find on websites that haven't been published yet and how likely they are to be posted to Rotten Tomatoes in time. So, I take all that information and each step of the way has a different model that applies to it.

That's very cool. I've seen you talk too, though, that sometimes you do bets for fun, kind of based on gut feel. I'm wondering if the two betting styles ever overlap. Like, you have the model, but every now and again you're like, "No, this song's a banger. I bet it actually does better than the model says."

Yeah. So, today's Thursday and at midnight Eastern they're going to drop some new songs, like the J. Cole album's gonna drop. And if something big is coming up I'll usually stay up until midnight and just listen to them. And at that point, you don't really have any data on that specific song, so it really is a matter of listening to it and seeing if it's going to be any good or perform well. But for something like J. Cole, where it's an album people have been waiting for, I'll go back and compare how he did on his last studio album, which I think was in 2021. He did a mixtape release in 2024, as well. So I'll see how he did in the past and then consider if his popularity has dropped or if it's risen. I think it's probably dropped a little, but not enough that he won't get number one for the day tomorrow. So, it's a little bit of gut and a little bit of research on how that particular artist has done.

I like that a lot. A mixture of hard data and cultural analysis.

Yeah, for sure.

But yeah, I think that's a good overview of what it means to build a model. Let's say somebody's just starting out today. They've probably lost some money gambling on sports or whatever and they're trying to get more sophisticated. Where do you think the highest upside is these days? Where are the most inefficient markets? Where could somebody actually go out and find edge, in your mind?

So, I think some of the most inefficient markets are in culture as well as in politics. I think a lot of people come into those markets and just bet based on vibes or guts without really understanding what's going on. And then they'll do so in just ridiculous volumes, especially on the politics side.

For example, on Tuesday, they had the House vote for reopening the government. And when the Speaker of the House opens or schedules a vote, he doesn't do it without having a pretty good idea that he's going to win the vote, right? Because it's pretty embarrassing if you put something on the floor and you lose, especially something as high profile as a government reopening vote. So, he put it on the floor, and the vote came in, and it stalled with four Republicans not voting, and two Republicans voting no.

And if you have any experience following this stuff at all, you would know that that happens every single time. And only one of those no votes is gonna stick, and that's Thomas Massie. It's the same guy every single time.

So, the market just went nuts. Like the price of it not reopening went down from like 91¢ where it was when it peaked in the early morning to the 60s, which was completely stupid because if you follow this stuff, you know that not only does this happen every time, it's the same people every time and they cave every time.

So, I was able to put pretty much my whole portfolio, like $160,000 I had open, onto this bet that the government would reopen. Then, of course, they ended up voting yes. The one no flipped, exactly like anybody that's following it knew would happen, and I ended up making like $40,000.

But it's one of those markets where there was almost infinite volume coming in on the wrong side, because I think they must have been pushing it hard on Robinhood or Coinbase or some of these affiliates, where people see it as a chance to hit a big bet when people that follow it in detail and know what's going on know that it's a big loser.

But it's one of those things where there's an edge available there, but you've got to do the research to know which side is going to be correct.

Yeah, the sheer amount of money coming in, I think that's a really interesting point. I remember when the shutdown first happened, there was this rumor going around that there was a lot of insider money betting that the shutdown would not happen. And insider money, you know, historically just means it's a fresh account and it's a big bet. But there were a lot of people coming in and voting no who were just new accounts and clearly not insiders because they were wrong.

I think it's an interesting time for prediction markets to the extent that new volume records almost every month sort of changes how people have to look at these things from an analytics perspective.

And some of this stuff isn't that susceptible to insider trading because in this case it's 435 people voting, or in the Senate it's 100 people voting. Who's going to have insider information on how all of that's gonna go? Often they're not sure until it gets to the floor and the votes start coming in.

Yeah, impossible to know anyway. That's funny. I think that leads to a more interesting point. You know, you've been here a couple of years now. It really seems like the landscape's changing due to this sheer amount of volume coming in. I've sort of heard the scuttlebutt about more professional market makers -- the Jumps or Citadels of the world or what have you -- coming in to market make. And more professional sportsbooks and oddsmakers and things like that. Are you seeing the markets become more sharp and sophisticated over time? Or is it mostly retail money coming in? Do you see that on a market-to-market basis -- depending on the subsection -- or is it more that the whole vibe is shifting?

The world that I play in, I think it's actually become dumber as the volumes have grown. Because me and my friends who are sharp at this stuff, we're constantly running out of cash because there's just so much dumb money coming in for us to take.

So I think I've got almost $300,000 in my account right now, and I rarely have much cash available because there's just so much free money that I can throw it at.

That's an incredible answer. I love to hear that.

And I wouldn't have predicted this. I thought it would get sharper over time. But it seems to be getting -- or at least staying -- pretty dumb so far.

It does seem like spreads are closing a little bit, just with the amount of liquidity. I heard you mention on a different podcast that tight spreads to you signaled sharp money. Is that still the case? What are the signals you look for that indicate there might be some sharks in these waters?

Well, it's how tight the spreads are, but it's also what types of markets they are, like in the sports. I still think sports are extremely sharp. I think the financials are extremely sharp. And I think politics can be sharp. It's just, I happen to be on the right side of that.

So they'll be tight spreads, but I'm the one with a 100,000 share bid that's hoping that the dumb money will buy it.

That makes sense. Let's talk about how you can get sharper. I think that with Claude Code and some of these tools… you were already familiar with how to work with an API and how to call some more advanced data from some of these websites and get edge. Have you started incorporating any more advanced tools into your trading at all or do you just already have your setup and you're good to go?

So I'm actually kind of a moron when it comes to the tech stuff. I've got a friend that sets all that stuff up for me. Like I know Visual Basic 6 from 2000 or something like that. I just haven't bothered to learn anything new. So mostly, I come up with the ideas and my friend codes it for me.

We have been pulling in some AI tools, but we don't really use them to generate models or anything like that. What we do is have them interpret data for us. When we find a review or a tweet or feedback on a movie for Rotten Tomatoes, we don't want to manually interpret all of those. So we pass them into an AI tool to get a rating and to be able to incorporate that into our existing models.

I also use AI tools as kind of a sanity check on a bet. I don't think just asking it for odds works; it's almost always way off. But if I've got an idea for a play I want to make, I'll run it by the tools to get some feedback on it. Oftentimes the feedback is stupid and I have to say, "Oh, you didn't think of this, did you?" and it'll be like, "Oh yeah, you're right." So, I don't think it can replace human logic yet, but it is useful as a second check.

I really like that idea. A lot of people use it to just ask, "Give me the odds that this will happen," right? But all it can really spit out is what the wisdom of the crowd already is. Like it's just doing an internet search, right? Just a really glorified internet search. But in the converse, if you bring it to an idea, it is almost asking the crowd if the idea is good or not. That's very smart.

But some of the answers are comically bad. On the music stuff, it was saying Taylor Swift was a 90% favorite last year when she was actually like a 99% underdog at the end. It doesn't have access to the same level of granular data that I can access from Spotify and Kworb and stuff like that. So it's very unreliable.

But that still makes sense to me, though. Because if all the internet is just wine moms who like Taylor Swift, then that's what the AI will tell you, right?

You'll see it in the comments all the time, just people repeating verbatim what the AI tools are saying and then taking positions on it. It's just a good way to lose money fast.

I love that. Let's get into some actual markets. You had a tweet going over some of the stuff you're excited about this month. Would love to hear you walk through what's going to keep you up until midnight, what you're excited about, what you're going to be trading?

Probably the biggest one is continued congressional action on the Department of Homeland Security. They passed a continuing resolution that goes through February 13th. So that means that all the other departments are fully funded through October 1st, but DHS is only funded through February 13th, and it was funded at the current level, so they didn't implement any changes. So, the standoff here is that the Democrats want to put a bunch of guardrails around what ICE agents can do, and the Republicans don't want that. So, they're kind of at a standoff and they've got very little time to resolve it. So there's a market on when DHS will be fully funded for the year.

I've got a ton of shares at 50¢ for “No” that it won't be done by March 1st. And that one's gone up quite a bit. It's at 70¢ now. So, that's one to watch. Once they start talking about doing another continuing resolution that goes through, like, March 5th or whatever, I might hammer on that a little bit more. I'm kind of just waiting for it to get to the point where the path is clearer. Because they could still come to some sort of resolution and pass it. But, at some point, they're gonna probably choose a different path, and once that path is clear, then I'll be more comfortable sizing up on this bet. So, that's one thing I'm watching.

Another one that's been great is they introduced a new market, actually two new markets. One of them is: Who will have a #1 song on Spotify USA in February? And the other one is: Which songs will be #1 on the Billboard Hot 100 in February?

So, for the Spotify one, that's 28 days of data that can resolve the market. So far, I think it's been Noah Kahan and Bad Bunny have been the two. But there's still 24 days or whatever of data that can come in that can have somebody else get number one. So, that's kind of fun to watch and kind of scope out. And Bruno Mars is gonna drop an album on the 27th. Will his album be popular enough to get number one?

And then J. Cole drops his tonight. Will that be popular enough to get number one? Because Bad Bunny is doing some huge numbers right now. But I think that with the album drop, J. Cole will be able to pass him for at least one day. But it's that type of thing, kind of looking forward to what new releases are coming out. And then Taylor Swift is going to drop a music video for "Opalite" on Saturday, and she's dropping it on Spotify and Apple Music, because YouTube doesn't count towards Billboard anymore.

So, this is kind of a new thing. We haven't really seen this before. And we can see how that is going to impact the Spotify numbers. Will that video be enough to get her in first place on Saturday? I don't know. So those types of things are pretty interesting to me.

It's kind of interesting how there's some overlap in there as well, right?

Yeah, definitely.

These markets might interact with one another a little bit. I'd like to talk a little bit more about some of those, but before I do, you were talking about your shutdown market position. Do you ever trade around the positions before settlement or are you the type of person who tends to hold until the end?

Most of the time I buy and hold until settlement, but for some markets I don't. Like the last shutdown market, I probably took six different positions throughout the week, just playing different news plays. And my win percentage wasn't great. I think I probably got half right and half wrong. But the ones that I got right were such big wins that it offset everything else. And the ones I got right, I bought the morning of the shooting. I made like $15,000 just by buying “Yes” on shutdown for so cheap, but then I ended up selling out of that and taking profits and then flipping to the other side to “No” because “Yes” was at like 80¢, so I picked up some “No” at 20¢. And that play wasn't profitable.

And then I did a couple more plays like that where I just thought it would go one way or the other and it didn't move much, so I ended up cashing out. And then the last play that I made that was profitable was when a tweet came out where Thune basically said, "Well, if we're close, Trump just won't shut down the government." So, as soon as I saw that, I was one of the first to act and I just hammered. I probably bought 30,000 shares, and then I sold it a couple of minutes later for an $8,000 gain.

So I do that sometimes, but the ultimate goal is to be on the right side at the end and be on the right side with sufficient size that I can make a good profit.

Yeah, I often find it's much easier to sort of hold the swing if you think you're going to be right in the end anyway. And so I try to avoid taking the opposite end.

With the congressional markets, it usually gets to a point where the path is clear. And once it gets to that point, like when Mike Johnson started saying, "Okay, we're going to do the vote tomorrow." Or, even before that when they started saying the House wasn't gonna come back in time, so they weren't gonna vote until probably Tuesday. So, at that point, it was clear that the shutdown was going to happen and that's when I was able to shift a large position onto the winning side. But I still ended up making a lot of money before that just playing the swings.

Yeah, nice. I think a lot of the politics markets, you know, I don't think it'll ever be my specialty. It's just not the style that I think we're developing over at OddChain, but like headline-based stuff and the huge swings that can come out of it, it seems like politics is full of that.

Yeah, for sure. And what's nice about the politics markets and where the edge comes in is that it's not a market where there's a data point announced and somebody can create a bot to find that data point and immediately trade it. You need to do some level of analysis usually.

So, that lets somebody like me, where I'm just looking at Twitter -- I don't have any bots scraping or looking for information here -- I'm just looking at Twitter. I can see a headline and I can quickly interpret what it means and then go and trade based on it.

Whereas if it was something like the TSA numbers get released, as soon as those numbers are released, the market's over because it's black and white. You either win or you didn't.

With these things, you need to put some level of political analysis into the news.

Yeah, I think the one I sort of have my eye on with all that in mind is the Iran strike markets. I think they're like crazy deep liquidity, but seem just laughably headline driven. You know, somebody shoots down a drone, the president says something absurdly bellicose, the Ayatollah says something absurdly bellicose. Like these things can go up and down and zig-zaggy so quickly. I'm wondering if you're watching that one at all or if it's just one of those things that's too high variance? Like it's really hard to find out how it'll actually end. How are you thinking about that one?

So, that's not one that I have on my radar. I don't do a ton of geopolitical stuff. Especially stuff that you have to monitor almost 24/7. Because the Iran stuff can happen… Like the Venezuela stuff happened at like three in the morning. And Iran stuff can happen pretty much any hour.

With the stuff that I do, I can kind of time-box it. Like usually not a ton of stuff happens off hours in politics. And the music stuff I do, there's a data drop each morning for Spotify. There are data updates for Apple Music throughout the day, but I just have those pushed to Telegram for me. And then the Billboard stuff drops on Monday afternoon. So, I don't need to be glued to my phone all the time.

But I think for something like Iran, where it's an ongoing story, there's no clear end date, you really have to make a commitment to follow this stuff almost 24/7 for an indefinite amount of time, and I'm just not willing to make that commitment to a market like that.

Yeah, I mean, somebody who is, though, you can imagine the guy who has the alert set up, the pager duty. Something happens, they can sell out of a position, they can sell into a position… It seems like where the edge is just your ability to either be awake or wake up. I don't think I'm there.

Yeah, and every trader is different. There are lots of people that are willing to put in 12, 13, or more hours a day on this stuff, and that's just not where I am at this phase of my life. I don't have any interest in doing that. I want to be profitable, but I also want to have a good balance. I've got three young kids. I like to travel a lot, so I don't want to make my life prediction markets. I want it to be something that I do to make money, but not something that consumes my life.

Healthy as hell. Yeah, you were talking on a different podcast, like you took two months off last year, which I think is really cool. Like, you don't hear about serious prediction markets people often touching grass to that extent.

Yeah, I took the entire summer off. Just because it gets stressful to monitor markets for months and months on end. So, you've gotta find a balance so that you can keep your sanity.

Makes total sense. Well, we've been chopping it up for about half an hour. I want to let you go soon. But before we do, are you doing any Olympic stuff?

No, I kind of avoid sports because I'm awful at them. And one of my New Year's resolutions was to not do sports this year. I think I lost like $20,000 on sports last year. So I thought, you know what? That's probably not for me.

Again, incredibly healthy. I guess, like, the reason why I think I like sports is also the reasons why they're really tough to trade. Like big upsets can happen. You can have these kinds of miracles in the last minute. That's like why you watch this stuff, but also it just makes it gut-wrenching to move around. I don't know though. And we were talking earlier in the pod about how they're also just filled with sharps at this point. But something tells me that, like, curling isn't going to be as…

Right, right. There's edges to be had, but it's just not my thing. I'm pretty comfortable in my space of politics and culture and I'm able to put almost all my capital into play almost all the time, and I'm making a ton of money doing it, so I don't really see a need to expand my field of expertise right now.

Really smart. Really appreciate it. So, one last question before you go. Gaëtan Dugas is an anagram?

No. If you look it up, he was rumored to be patient zero for AIDS. So, he was like the first guy. He was a Canadian flight attendant and he was kind of a slut, so he'd just fly around and have sex with a bunch of men. And they thought he was like the guy that really spread AIDS around. But it turns out that he probably wasn't. But he's just an interesting historical character, and I thought it'd be kind of funny to pick a guy like that where people might… like a lot of people probably just think that's my real name, but if you get curious and look it up, it'll be like, oh, that's kind of interesting.

I love it. Interesting energy to bring to your prediction market alter ego.

Yeah, well, it was back in the days of PredictIt, and the PredictIt comment section was kind of a cesspool with people insulting each other and kind of like a toxic masculinity thing, so I just thought it'd be funny to pick a historical figure that was obscure and primarily known for having sex with men, even though I'm a 46-year-old heterosexual guy.

Incredibly based.

I do stupid shit all the time. If you follow my Twitter, you're probably well aware of that.

Look, we're all in prediction markets, man. This is good stuff. But yeah, really appreciate you coming on. Anything you want to shout out, any projects you're working on or let the people know where to find you?

Yep, so I'm @GaetanD on Twitter. That's pretty much the only place I do anything. So, follow along. I post a lot of prediction market stuff, a lot of politics, a lot of culture, a lot of bad jokes.

Down to earth and not just posting the same one tweet about some profitable trader someplace.

No, no. It's basically a place for me to capture my thoughts and if people are interested in reading that, you can.

Awesome. But yeah, once again, really appreciate you jumping on. Really love that you took the time and, um, yeah, looking forward to seeing how you perform in February.

Yeah, thanks. Thanks for having me on, and I look forward to watching your platform grow.

Thanks, man.

Cheers.