Complete Guide to Polymarket Arbitrage
How to lock in risk-free profits by exploiting price differences between Polymarket and other prediction platforms.
What is Polymarket Arbitrage?
Polymarket arbitrage involves buying "Yes" shares on Polymarket and "No" shares on another platform (like Kalshi) for the same event, such that the total cost is less than the guaranteed payout. Because one outcome must happen, you are guaranteed to win on one platform, covering your losses on the other and leaving you with a profit.
Why Does It Exist?
Price discrepancies occur due to:
- Different User Bases: Polymarket is crypto-native (USDC/Polygon), while Kalshi is US-regulated (USD). Different traders have different sentiments.
- Liquidity Constraints: Large orders can temporarily skew odds on one platform.
- News Latency: One market might react faster to breaking news than another.
Step-by-Step Execution
- Find an Opportunity: Use the EventEdge Scanner to instantly spot events where the implied probabilities sum to less than 100%.
- Calculate Stakes: Determine how much to bet on each side to equalize your profit regardless of the outcome. Our built-in calculator does this for you.
- Execute Simultaneously: Place limit orders on both platforms as quickly as possible to lock in the prices.
Pro Tip: Watch the Fees
Always account for trading fees and withdrawal costs. EventEdge's "Include Fees" filter helps you see the true net profit.
Risks to Consider
While the math is risk-free, execution has risks:
- Execution Risk: Prices might move while you are placing the second leg of the trade.
- Smart Contract Risk: Ensure the market resolution rules are identical on both platforms.
Conclusion
Polymarket arbitrage is one of the most reliable ways to generate alpha in the prediction market space. With the right tools and speed, you can consistently harvest these inefficiencies.