About Arbitrage Agent

Founder

Alex Mercer

Arbitrage Agent is a one-person project. It started as a personal tool: the same event priced differently on Polymarket and Kalshi, and no off-the-shelf software that handled cross-platform event matching accurately enough to be trusted with real capital.

The first version matched markets with a simple embedding similarity threshold. After too many false positives (different events, same price movement), the current approach adds a custom reranker and resolution-criteria diffing layer. Today, on top of the automated pipeline, every matched pair is validated before it goes live.

Your capital stays on-venue

Arbitrage Agent never holds your funds. Your capital stays in your Kalshi and Polymarket accounts at all times. We connect via API keys with read + trade permissions only — no withdrawal access, ever.

You can revoke API key access at any time from your Kalshi or Polymarket account settings. There is no lock-in and no custody risk.

API permissions — what the agent can and cannot do

Risk controls

Circuit breaker: If one leg of a trade fails to fill, the other is automatically unwound within 400ms. This ensures zero directional exposure — it's always both-or-neither.

Kelly criterion sizing: Position sizes are calculated using the Kelly criterion, optimizing for long-term growth while limiting drawdown risk.

Kill switch: Instantly exit all positions and stop the agent with one click from the dashboard.

Dry-run mode: Test the full system with paper trades before committing real capital. See exactly what the agent would do without any risk.

Semantic matching, validated before going live

Polymarket and Kalshi list the same events under completely different titles. Simple text matching fails — "Fed cuts rates in May FOMC" and "Will the Federal Reserve cut at May FOMC?" are the same event with zero keyword overlap.

Arbitrage Agent uses OpenAI embeddings combined with a custom reranker to semantically match events across platforms. This approach — with every pair validated before it goes live — links events across thousands of monitored markets that text-based systems miss entirely.