An arbitrage pays a fixed amount per contract, but only when the contracts settle. Until then the cash behind both legs is committed. This article collects what Polymarket and Kalshi document about settlement timing, then shows how to compare opportunities that tie up capital for different lengths of time. The numbers in the worked example are illustrative, not live data.
Two clocks: the event, then the settlement
Settlement time has two parts. First the event has to end, which is set by the market, not the platform: a game ends tonight, an election months from now. Then the platform has to determine the result and pay out. The second part is the one the documentation describes.
Polymarket: a 2-hour window, or days if disputed
Polymarket's resolution documentation describes UMA-resolved markets in three possible flows:
- No dispute: a proposal, then a 2-hour challenge period, then resolution. The docs put this at about 2 hours after the proposal.
- One dispute: a second proposal round follows.
- Two disputes: the resolution goes to a vote by UMA token holders, after a 24 to 48 hour debate period and about 48 hours of voting.
The docs put a disputed resolution at 4 to 6 days in total. Once a market resolves, winning tokens are redeemable for $1.00 each and losing tokens become worthless. Up-down markets resolved by Chainlink TWAP do not use the UMA process. How disputes affect the second leg is covered in Polymarket UMA disputes and resolution mismatch.
Kalshi: determination, a settlement timer, then payout
Kalshi's market lifecycle documentation lists these states: a market is closed after its close time, determined once the result is known, and finalized when settlement is complete and positions have been paid out. While a market is determined, a settlement timer runs (the length is visible in the API as settlement_timer_seconds) and the result may be disputed. A dispute can move the market to disputed and then amended, which restarts the timer. The settlement page says markets typically settle shortly after expiration, but timing can vary. Winning contracts pay $1 each, and only net positions are settled.
The mismatch that matters: the two legs settle at different times
The two platforms do not pay out together. One leg can be paid while the other is still in a challenge period or a settlement timer. In a clean pair this is only a timing gap. In a pair where the rules differ, it is where a mismatch shows up, as one leg resolves and the other does not, as explained in Is Prediction Market Arbitrage Really Risk-Free?
Comparing returns over time
An illustrative example. Suppose two pairs each show a 1% net edge after fees. Pair A settles in 10 days and pair B in 6 months. Both pay the same amount per contract, but A frees the capital sooner so it can be used again. A simple way to compare them is how many times the capital could turn over in a year: 365 / 10 is about 36 turns for A against about 2 for B (365 / 182). With the same 1% edge, A could in principle earn many times more per year on the same capital, even though the number on the screen is the same. This is a simplification: real pairs rarely settle to a schedule, capital is rarely reused at the same size, and unused cash earns nothing in either account.
This is why the net edge on its own is not the whole picture. Our earnings guide and net edge guide cover the per-trade side; time held is the other half.
Practical checks
- Find the expected end of the event on both listings, and the latest date either can run to.
- Ask what happens to the gap if one platform settles days after the other.
- Remember that you can sometimes close both legs early on the order books instead of waiting, at whatever the books offer then, which is covered by depth.
- Keep enough cash free that tied-up capital does not stop you taking the next opportunity.
Where Arbitrage Agent fits
Arbitrage Agent shows each validated pair with its net edge after fees and depth in a live feed, with a step-by-step guide for both legs. You place the orders yourself and decide how long you are willing to hold. See the plans or start with the Starter plan.
To try your own numbers, use the free arbitrage calculator: it takes the two prices, your stake and the days to resolution, and shows the fees, net edge and annualised return.
To turn a return and a lockup period into a yearly rate, use the free annualised return calculator.
Related articles
- Polymarket UMA Disputes and Resolution Mismatch
- How Much Can You Make with Prediction Market Arbitrage?
- Complete-Set Arbitrage on Polymarket vs Cross-Venue Arbitrage
- How to Arbitrage Polymarket vs Kalshi
Key terms: Resolution Risk · Binary Event Market · Spread