News Arbitrage — Polymarket Price Reaction to Breaking News

How It Works Polymarket prices update based on human and automated order flow. When material news breaks — election results, economic data, geopolitical events — there is a window between the news becoming public and Polymarket's order book fully reflecting the new information. This strategy automates the detection of relevant news and executes directional trades during that window. The `benjee-inc/polymarket-arb-dashboard` describes itself explicitly as a 'Polymarket news arbitrage bot dashboard'.

Entry Conditions A news event is detected via API feeds (likely news APIs, social media firehoses, or government data release endpoints). The bot classifies the news as positive or negative for a given market outcome and submits a market order or aggressive limit order before the spread widens. Speed of detection and classification is the primary edge.

Exit Conditions The position is typically closed once the market has repriced to reflect the news — either by selling into the repricing momentum or by holding to resolution if the news is definitive (e.g., a declared election winner). The dashboard component suggests active position monitoring.

Verified Results & Implementation Notes The `benjee-inc/polymarket-arb-dashboard` repo (19903KB, 0 stars, 0 forks) is large, suggesting real implementation, but the lack of community engagement means quality is unverified externally. The `callenbspr-ux/godseye` repo ('Live trading / polymarket signals', 3791KB) may implement a related signal detection layer. News arbitrage is a well-documented strategy in traditional finance and is theoretically applicable to prediction markets.

Risks News classification errors lead to trades in the wrong direction. Polymarket's CLOB may already be moved by other latency-sensitive bots before this system acts. Fake news or misreported headlines can trigger false signals with full position loss. Regulatory and terms-of-service risk if news feeds are scraped without authorization. This strategy degrades rapidly as competition among news-arb bots increases.