Polymarket Arbitrage Calculator
Detect arbitrage opportunities on Polymarket by comparing Yes and No prices. Find guaranteed profits when market prices are mispriced.
Ready to Detect Arbitrage
Enter the Yes and No prices from a Polymarket event and click detect to find arbitrage opportunities
What Is Arbitrage in Prediction Markets?
Arbitrage in prediction markets refers to a situation where you can guarantee a risk-free profit by simultaneously buying both outcomes of a binary event. On platforms like Polymarket, every event resolves to either Yes or No. Each outcome has a price between $0.01 and $0.99, and the winning shares pay out exactly $1.00 each. In a perfectly efficient market, the Yes price plus the No price should equal exactly $1.00, because the probabilities of all outcomes must sum to 100%. When these prices sum to less than $1.00, you can buy both sides and lock in a guaranteed profit regardless of which outcome actually occurs.
For example, suppose a market asks whether a certain event will happen by the end of the year. If the Yes shares are priced at $0.45 and the No shares are priced at $0.50, the combined cost is only $0.95. That means for every $0.95 you spend buying one Yes share and one No share, you are guaranteed to receive $1.00 back when the market resolves. The $0.05 difference is your risk-free profit. Scale that up with a larger investment and the guaranteed return can be meaningful, even if the per-share margin is slim.
Why Do Arbitrage Opportunities Appear on Polymarket?
Arbitrage opportunities on Polymarket typically arise from a few structural factors. First, the platform uses an order book model where different market makers and traders independently set prices for Yes and No shares. Since these are separate order books, there is no automatic mechanism forcing them to sum to exactly $1.00 at all times. When one side sees heavy selling pressure while the other side remains unchanged, the combined price can temporarily dip below the $1.00 threshold.
Second, rapid news events can cause prices on one side to move faster than the other. If breaking news makes the Yes outcome more likely, traders rush to buy Yes shares and the price spikes upward. But it may take a few seconds or minutes for the No side to adjust downward accordingly. During that window, the combined price might fall below $1.00, creating a brief arbitrage opportunity. High-frequency traders and bots actively scan for exactly these windows, which is why arbitrage gaps tend to be small and short-lived on active markets. Less liquid markets with fewer participants tend to have larger and longer-lasting mispricings.
How Fees and Slippage Affect Arbitrage Profits
Before executing any arbitrage trade, it is critical to account for trading fees. Polymarket charges fees on trades, and these can eat into or completely eliminate a theoretical arbitrage profit. If the combined price of Yes and No is $0.98 and the platform charges a 2% fee on each side, your effective cost could exceed $1.00, turning what looked like a guaranteed profit into a guaranteed loss. Always calculate your net profit after fees before placing any trades.
Slippage is another practical concern. The prices you see in the order book are for a certain quantity of shares. If you try to buy a large number of shares, you may need to fill orders at progressively worse prices, pushing your average cost higher than the displayed price. This is especially relevant on less liquid markets where the order book is thin. The calculator above uses the prices you input directly, so always verify that sufficient liquidity exists at those prices for your intended investment size before trading.
Risks and Practical Considerations
While arbitrage is theoretically risk-free, there are practical risks to be aware of. Execution risk is the most significant: prices can change between the time you place your Yes order and your No order, potentially eliminating the arbitrage window. Market resolution risk also exists in rare cases where a market may be voided or resolved ambiguously, though Polymarket has dispute resolution mechanisms to handle edge cases. Additionally, your capital is locked until the market resolves, which could be days, weeks, or months away. Even a guaranteed 3% profit looks less attractive if your money is locked up for six months.
Smart arbitrage traders focus on markets that are close to resolution (reducing capital lockup time), have sufficient liquidity (reducing slippage), and offer margins large enough to comfortably cover fees. They also use automated tools to detect and execute trades quickly, since manual detection and trading is usually too slow to capture the most profitable opportunities. This calculator helps you analyze whether a given price combination represents a genuine opportunity after you have already identified potentially mispriced markets.