What Would be the Effects of (Relatively) Widespread Precognition on The Stock Market?
I am working on a story in which around 1% of the world population has at least some semblance of a metahuman ability. Many metahuman abilities are advantageous in traditional employment, and I imagine that many of those who possess such abilities would put them to economic uses. For precognition users (henceforth abbreviated "precogs" in particular) there would be anywhere from several hundred to a few thousand of them. Some of them would probably be picked up by hedge funds, trading firms and other financial actors. I wonder what the effects of precognition on the stock (and other financial) market(s) would be.
Some Points of Note
The below is not necessarily accurate for all precogs in my setting, but it's the rules of thumbs that apply to most precogs in the verse and is probably sufficient for the purposes of this question.
* Precogs cannot anticipate their own decision (they can anticipate truly random processes e.g a quantum die) and can anticipate the world when they take a given course of action.
* Most precogs aren't clairvoyant and receive their sensory stream at some point in the future (so they cannot see beyond their death for example).
* If two precogs $X$ and $Y$ try to anticipate each other, only one of them would correctly anticipate the other. 205
Let the probability that $X$ can anticipate $Y$ be $X(Y)$, and the probability that $Y$ can anticipate $X$ be $Y(X), X(Y) + Y(X) = 1$. This relation is transitive. $X(Y) > Y(X), Y(Z) > Z(Y) \implies X(Z) > Z(X)$ I think this can generalise to situations involving multiple precogs but I might be wrong. The above restriction applies when precogs are anticipating events impacted by other precogs even if not directly anticipating the actions of other precogs.
* In general, most precogs are short range (80% have a max range under a minute, 90% under an hour and 99% under a day).
Questions
1. What major effects would the employment of precognition by financial actors have on markets?
2. Would markets be exploitable to precogs? 759