The predictive processing (PP) framework suggests that the mind works by making and testing predictions. According to PP, only prediction errors (rather than all sensory inputs) are processed by an organism’s perceptual system. Prediction errors can be weighted such that some errors (usually those deemed more reliable) will be more influential in updating prior beliefs. It has recently been argued that autism spectrum disorders (ASD) result from an underlying predictive processing mechanism. The weight given to sensory prediction errors is thought to be inflexibly high in ASD, meaning that the perceptual system utilizes even relatively small prediction errors to update prior beliefs. Deficits in executive functioning, theory of mind, and central coherence are all argued to flow naturally from this core underlying mechanism. The diametric model of autism and psychosis suggests that these disorders result from opposite cognitive tendencies. Building on the diametric model, others have argued that autistic-like traits and positive schizotypy represent diametric cognitive-perceptual and behavioral traits that exist on a continuum in normal, non-clinical populations. In this paper I argue that positive schizotypy (which consists of magical thinking, unusual experiences, and ideas of reference) can be explained by the opposite mechanism to that of autism, namely an inflexibly low weight given to sensory prediction errors. This mechanism can potentially explain such disparate features of positive schizotypy as increased exploratory behavior, hyper-theory of mind, attentional differences, idiosyncratic worldviews, and a hyper-active imagination.