Arbitrage#057

Triangular Arbitrage Across Linked Markets

Some markets are logically linked: for example 'A wins overall', 'A wins region R', and 'region R goes A's way' must obey the rule that the chance of A overall equals the chance A wins R times the chance R happens. When the separately-listed prices break this rule, you buy the underpriced combination and sell the overpriced pieces so the trade pays for itself. The edge is that nobody checks whether these related markets stay consistent with each other.

What you need to run it

  • Dependency graph linking conditional/marginal markets
  • Probability-consistency solver flagging chain-rule violations
  • Multi-leg simultaneous execution bot
  • Mapping of resolution sources to confirm logical linkage

Where this applies

Markets on Polymarket where triangular arbitrage across linked markets is the natural play:

  • Will the Republican nominee win the 2028 presidential election?
  • Will the Republican nominee win Pennsylvania in 2028?
  • Will a specific team win the 2027 Club World Cup?

Capabilities this demands

Model / quantCustom code / APIData ingestionManual research

At a glance

CategoryArbitrage
Requirements4
CapabilitiesModel / quant, Custom code / API, Data ingestion, Manual research
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.
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