Cross-market weather arbitrage
Exploits price discrepancies between Polymarket weather markets and external sources like NOAA forecasts or other prediction platforms.
The report mentions 'weather bots' detecting gaps between Polymarket's implied probabilities for temperature/rainfall and official meteorological model outputs. The bot identifies when the market price deviates more than a threshold (e.g., >5%) from the model's probability. Entry: buy underpriced outcome, sell or hedge overpriced on another exchange or via manual offset. Exit: when price converges to model value, typically before market resolution. Results: small consistent edges during forecast updates but requires fast API access to weather data. Implementation: scrapes NOAA/ECMWF feeds, compares to Polymarket's CLob API, places limit orders.