Plain-English definitions of every concept you need to understand cross-platform arbitrage on Polymarket and Kalshi.
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Prediction market arbitrage is the practice of simultaneously buying YES on one platform and NO on the other for the sam…
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In prediction market arbitrage, the spread is the difference between $1.00 and the combined cost of YES and NO contracts…
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Two-leg execution is the simultaneous placement of both sides of an arbitrage trade — buying YES on one platform and NO …
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A circuit breaker is an automatic risk control that unwinds an open leg when the second side of an arbitrage trade fails…
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The Kelly criterion is a mathematical formula for calculating the optimal fraction of your bankroll to bet on each trade…
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Complement arbitrage exploits the mathematical identity that YES + NO for the same binary event must equal exactly $1.00…
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Resolution risk is the chance that a prediction market contract resolves differently than expected due to ambiguous word…
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Cross-market arbitrage involves exploiting price differences for the same underlying event or asset across two or more s…
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A Central Limit Order Book (CLOB) is a trading system where buy and sell orders are queued by price and time priority an…
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A binary event market is a prediction market where the contract has exactly two possible outcomes — YES or NO — each set…
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An event contract is a financial instrument that pays $1.00 if a specified real-world event occurs and $0.00 if it doesn…
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A market maker in prediction markets is an entity that continuously posts both buy and sell orders on event contracts, p…
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Liquidity in prediction markets refers to the depth and tightness of the order book — how much volume can be traded at o…
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A partial fill occurs when a limit order is only partially executed because insufficient liquidity exists at the request…
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Directional exposure means your profit or loss depends on which way an event resolves. Pure arbitrage trades have zero d…
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A dry run — also called paper trading — operates an arbitrage agent in simulation mode: it identifies opportunities, cal…
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Non-custodial means the automation layer never holds, moves, or controls your funds. In a non-custodial trading architec…
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A kill switch is a manual emergency stop that immediately halts all agent activity — cancels all pending orders, exits a…
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Stale pricing occurs when the prices shown in an order book or API response no longer reflect current market conditions …
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Slippage is the difference between the expected fill price of a trade and the actual fill price. In prediction markets, …
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