Cross-market probability arbitrage
Executes trades when the implied probability of a nested event differs from the product of its sub-events on Polymarket by more than a 2% edge.
The bot scans all active Polymarket markets for logical relationships (e.g., 'Will X happen by Oct?' vs 'Will X happen by Sep?' and 'Will X happen between Sep and Oct?'). It calculates theoretical implied probabilities using conditional probability math. When a mispricing of at least 2% (after fees) is found, it buys the undervalued leg and sells the overvalued one simultaneously. Entry is immediate; exit occurs when the mispricing converges, typically within minutes. On 2026-08-17, no alpha signals were found for this strategy due to tight market efficiency, but the bot remained active with flat positions. The repo is a well-maintained open-source project with historical backtesting results across 12 months.