Arbitrage#002

Cross-Market Arbitrage (Related Events)

Find two or more markets whose outcomes are logically connected, then trade the gap between their prices when the math doesn't line up. For example, a candidate can't win the general election without first winning the primary, so 'wins general' can never be priced higher than 'wins primary' times the chance of winning given the nomination. When the crowd violates that relationship, you buy the cheap leg and sell the rich one. The edge is the inconsistency between linked prices, not a view on who actually wins.

What you need to run it

  • Model of the conditional probability between the linked markets
  • Automated price monitoring across multiple market URLs
  • Capital allocation rules to avoid correlated downside

Where this applies

Markets on Polymarket where cross-market arbitrage (related events) is the natural play:

  • Will Gavin Newsom win the 2028 Democratic nomination? vs Will Newsom win the 2028 presidency?
  • Will the Lakers make the 2027 NBA playoffs? vs Will the Lakers win the 2027 NBA title?
  • Will the Fed cut at the September 2026 meeting? vs Will the Fed cut at least twice in 2026?

Capabilities this demands

Model / quantCustom code / APIMulti-venue

At a glance

CategoryArbitrage
Requirements3
CapabilitiesModel / quant, Custom code / API, Multi-venue
VenuePolymarket (CLOB, Polygon)

Build it

Related arbitrage strategies

This is documentation, not advice. Poly Research & Robotics publishes how these strategies work because the method should be checkable — not as a recommendation to trade them. See the full strategy database (147 strategies) or the data resources directory.
Join Discord