Arbitrage gap sweeper
Monitors bid-ask spreads and cross-market price gaps across Polymarket and other CFTC-regulated prediction platforms, executing simultaneous buy-low/sell-high trades.
The report highlights 'arbitrage gaps' as a key theme, indicating mispricings between related contracts (e.g., same event on Polymarket vs. Kalshi or PredictIt). Strategy scans order books every second, looking for pairs where the combined bid/ask creates a risk-free profit after fees (0.1% taker). Entry: place buy order on cheap side and sell order on expensive side within milliseconds. Exit: immediate or hold until convergence. Results: typical 2-8% annualized returns, but capital-intensive and requires 24/7 monitoring. Implementation: uses websocket streams from both exchanges, Python with asyncio, executes marketable limit orders.