Original Title: Arbitrage in Polymarket. $30,000/month.
Original Author: @igor_mikerin
Translated by: Peggy, BlockBeats
Editor's Note: As the U.S. elections approach, the trading activity in prediction markets is heating up. On December 9, 2025, discussions about arbitrage in Polymarket on platform X focused on cross-platform price differences, automated trading bots, and hidden risks. With frequent price discrepancies between Kalshi and Polymarket and increasing technical barriers, prediction markets are evolving from "betting fields" into true arbitrage infrastructures.
Opportunities are fleeting, liquidity is thin, and differences in rules and black swan events remain major challenges. The author of this article provides a real-world demonstration of arbitrage structures, offering a clear reference for the increasingly fierce competition in prediction market arbitrage.
Below is the original text:
About a month ago, I noticed some arbitrage opportunities on Polymarket.com. However, the platform's liquidity was insufficient for me to further expand my positions, so I was planning to return to stock trading. That said, I currently still have about $60,000 invested in various markets on Polymarket. Most of these trades will expire after the election, at which point I will close them all at once. Below, I will introduce these positions one by one and provide some free code for those interested in exploring this market.
Arbitrage 1: Buy "Harris Elected President" and simultaneously buy all "Republican Wins Different Electoral Vote Margins" outcomes
This strategy is quite straightforward: betting on Kamala Harris winning the presidential election while buying all possible winning margins for the Republicans in the Electoral College. Essentially, these two types of positions hedge each other. If the total price of the positions on both sides is below 1, then the difference is the locked-in yield—this is the arbitrage space. As of today, the arbitrage margin for this trade is 3.5%, with 41 days until the election. Annualized, this is approximately equivalent to a 41% annual return.
The chart below shows how I constructed this trade. You can see that I bought nearly the same number of shares for almost all possible outcomes.
This is my position on Polymarket.com. You can see that I basically bought the same number of shares for each possible outcome.
This is a summary of my real-time orders on Polymarket. The average cost of these positions is 0.983, meaning my expected return is 1 – 0.983 = 1.7%. The cost basis for my most recent trade is 0.979, corresponding to a yield of 2.1%.
Arbitrage 2: Bet on Trump Winning and Hedge with "Democrats Win Popular Vote + Win Presidency"
This strategy currently shows an arbitrage space of 2.55%. In this combination, we are betting on Trump winning while hedging by betting on the Democrats winning both the popular vote and the presidency. Although this is not a completely equivalent hedge (since the Democrats could win the presidency without winning the popular vote), according to my model, the probability of this happening is very low. Therefore, I believe this hedge structure is robust.
Below are my actual trades, showing that I hold the same number of shares on both sides of the bet.
Arbitrage 3: Buy "No" on All Outcomes for Democrats and Republicans in the Popular Vote
In this trade, I bought "No" options on all possible outcomes for the popular vote. Currently, the arbitrage space for this is 6.65%.
Below are my actual orders. All trades except for one will win on election day. Therefore, the total profit from all winning positions in these trades (minus one loss) needs to be greater than the amount of that loss.
Be Sure to Read the Rules Carefully
An important tip: always read the rules of each market carefully. Some positions may look like arbitrage opportunities but could hide significant risks. For example, if a candidate is assassinated, even if you think you have built a "robust arbitrage," you could lose all your principal.
Price Differences Matter
One of the biggest challenges I encountered is market impact. Due to the platform's low liquidity, once I place an order, it often pushes the entire market price in my direction. This can create discrepancies between the buy price, sell price, midpoint price, real-time price, and actual transaction price. Below are typical examples from the trades mentioned earlier.
Good luck!
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