# How Arbitrage Agent Works

> From market scanning to locked-in profit — in 5 steps.

## Step 1: Continuous Market Scanning

Arbitrage Agent monitors thousands of binary event markets across Polymarket and Kalshi simultaneously. Every second, it compares YES and NO prices for events listed on both platforms — politics, crypto, sports, economics, and more.

## Step 2: AI-Powered Semantic Matching

The same event is often listed with different titles on each platform. The AI semantic matching engine (every pair validated before going live) identifies that "Will BTC reach $100K by July?" on Polymarket is the same event as "Bitcoin above $100,000 on July 1" on Kalshi — even when the wording is completely different.

## Step 3: Spread & Risk Calculation

When a price gap exists, the agent calculates the gross spread, deducts platform fees (~1% per side), and determines the net edge. Only opportunities above the configured minimum threshold (typically 1.5%+) are flagged for execution.

## Step 4: Parallel Two-Leg Execution

The moment the edge crosses your threshold you get a Telegram or email alert with a step-by-step guide: which side to buy on each platform, at what price, sized to your bankroll. Arbitrage windows typically last 30–200 seconds — enough to place two orders from one screen. Fully automated parallel execution with a circuit breaker is in final testing and rolls out to Operator subscribers soon.

## Step 5: Automatic Settlement

When the event resolves, one contract pays $1.00 and the other pays $0.00. Since you hold both sides, you always receive exactly $1.00 — and your profit (the difference between $1.00 and what you paid) was locked in at execution. No prediction required.

## Supported Venues

- **Kalshi** — CFTC regulated · US. Fee: tiered, 7% cap. Markets: 2,194. P99 latency: 184ms.
- **Polymarket** — CLOB international · Crypto. Fee: 2% intl, 0% US. Markets: 2,618. P99 latency: 276ms.

## Links

- Homepage: https://arbitrage-agent.com
- Pricing: https://arbitrage-agent.com/pricing.md
- Arbitrage Calculator: https://arbitrage-agent.com/calculator
- Full LLM context: https://arbitrage-agent.com/llms-full.txt