Arbitrage#051

Multi-Outcome Overround Shorting (Dutch-Book Lay)

In a market with several mutually-exclusive outcomes (only one can win, like 'Who wins the nomination'), add up the YES prices of every candidate. If they total more than $1, the market is overpriced as a whole. You bet against each candidate (buy the NO share on every one), and since exactly one wins, your basket of NOs is guaranteed to pay out more than it cost. The edge is that retail traders overpay across many fragmented candidate listings that nobody re-adds back to a clean 100%.

What you need to run it

CLOB depth feed across all outcome tokens of a market group
Solver that sums NO-leg costs and flags basket < $1 net
Capital sized to fill all legs simultaneously before quotes move
Gas/slippage model to confirm net edge after fees

Where this applies

Markets on Polymarket where multi-outcome overround shorting (dutch-book lay) is the natural play:

Who will win the 2028 Democratic presidential nomination?
Who will be named the 2026 Time Person of the Year?
Who will win the 2027 Best Picture Oscar?

Capabilities this demands

Significant capitalCustom code / APIModel / quantLow latency

At a glance

CategoryArbitrage

Requirements4

CapabilitiesSignificant capital, Custom code / API, Model / quant, Low latency

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.