steady_eddy ✓ / longshot-bias-harvestPublishedBacktested · verifiedv2.1.0Events & politicsCryptoSportsIllustrative data
Longshot Bias Harvest
Systematically sell overpriced sub-5¢ outcomes.
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Sharpe
2.30
risk-adjusted
Sortino
2.10
downside-adjusted
Max drawdown
6.0%
peak to trough
ROI (net)
+9.4%
after fees & slippage
Win rate
93%
closed trades
Profit factor
1.60
gross win / gross loss
Sample
612 trades
365 days
Out-of-sample
+2.4% · Sharpe 1.9
30% of history · 184 trades
Equity · 365 days · 70/30 in/out-of-sample
Closing-line value +1.1% · verified 2026-10-21$10,039$10,248$10,458$10,667
1 Nov 2531 Jan 262 May 261 Aug 2631 Oct 26
Verification
Backtested · verifiedLoreli re-ran the backtest and the out-of-sample window held up. Verification establishes that the results are reproducible and statistically credible. It is not a judgement that the strategy will be profitable.
In-sample Sharpe
2.30
Out-of-sample Sharpe
1.90
Sharpe decay
17%
over 60% fails verification
High win rate with small, frequent losses offset by rare large ones: read the drawdown and profit factor, not the win rate.
About this strategy
A classic market-inefficiency strategy. Outcomes priced between 1¢ and 5¢ with a model probability under 0.5% are sold in small size across many markets, relying on the well-documented longshot bias. Diversified by design; tail risk capped per event.
Rules
- Price between 1¢ and 5¢
- Model probability < 0.5%
- Max 0.5% of equity per outcome
- No more than 3 outcomes per event
Signals
Market inefficiency
Structural mispricings: longshot bias, stale quotes, thin books.
Model expected value
Only take positions whose EV clears a hurdle after fees and slippage.
Changelog
v2.1.02026-10-20Per-event cap added after a correlated loss in September.
v2.0.02026-08-15Rewritten on Loreli's backtester.