News Arbitrage on Polymarket

How It Works Breaking news events (e.g., election results, economic data releases, geopolitical events) cause immediate changes in the true probability of prediction market outcomes, but Polymarket prices often lag real-world information by seconds to minutes. A news arbitrage bot monitors news feeds in real time, rapidly maps news events to affected Polymarket contracts, and places trades before the market fully reprices.

Entry/Exit Conditions Entry is triggered by detection of a qualifying news event with sufficient confidence that it materially changes outcome probabilities. The position is sized based on estimated mispricing magnitude. Exit occurs either when the market reprices to fair value (closing the trade early for profit) or at contract resolution. Speed of entry is critical — the edge decays rapidly as other participants react to the same news.

Verified Results No performance data is published. The dashboard-based architecture (benjee-inc/polymarket-arb-dashboard) suggests monitoring and logging infrastructure exists, but no verified trading results are disclosed. The large repo size (20MB) suggests significant data pipeline or UI code.

Implementation Notes A dashboard interface is used for monitoring, suggesting human oversight is part of the workflow — either semi-automated or fully manual trade execution. Key infrastructure requirements include: low-latency news feed subscriptions, NLP or keyword parsing to map headlines to market IDs, pre-built order templates for rapid execution, and a market catalog linking events to contract addresses.

Risks News interpretation errors can result in large directional losses (e.g., misreading a headline). Polymarket's order book may have insufficient liquidity at the desired price immediately after news breaks. Other latency-focused traders and automated systems create intense competition for the same edge. Regulatory news or market-specific resolution rules may differ from the naive interpretation of a headline.