Arbitrage means profiting from a price difference on the same — or equivalent — outcome. In theory it locks in a gain whatever happens. In practice it's rare and rarely free.

What is arbitrage?

On prediction markets, arbitrage usually looks like one of these:

  1. YES + NO below $1. Buying both sides of one market for less than $1 guarantees $1 at resolution.
  2. Multi-outcome sums. In an event where only one outcome can win, the YES prices should add to $1; if they add to less, buying all of them locks a gain. See negative risk markets.
  3. Cross-platform. The same event priced differently on two platforms.

Example

A two-candidate event shows A at 47¢ and B at 50¢. Buying one YES of each costs 97¢ and pays $1 — a 3¢ gain per pair. Now add taker fees on Polymarket's politics rate (0.04 × p × (1 − p)): about 1.0¢ for each leg. Your 3¢ becomes roughly 1¢ — and only if both legs fill at those prices.

Hidden risks

  • Fees and slippage shrink or erase the gap.
  • Leg risk: one order fills, the other doesn't, leaving you exposed.
  • Rule differences across platforms can resolve the "same" event differently.
  • Capital lock-up until resolution.

Deeper dive: prediction market arbitrage between Kalshi and Polymarket.

Official source: Polymarket docs: Fees.

Next step

In the United States, the regulated route is the Polymarket US app. Read our guides on signing up and depositing to get started, start small and only use money you can afford to lose.