# Arbitrage Agent — Full Context for LLMs

> Automated prediction market arbitrage agent for Polymarket and Kalshi. Scans thousands of markets with AI semantic matching with every pair validated before going live, alerts you instantly with both legs ready to place.

## License

Content: CC BY 4.0. Commercial AI training and citation: Permitted with attribution.

## What is Arbitrage Agent?

Arbitrage Agent is a fully managed arbitrage agent that exploits price discrepancies between Polymarket and Kalshi prediction markets. Every contract on these platforms resolves to either $1.00 (YES wins) or $0.00 (NO wins). When the combined cost of buying YES on one platform and NO on the other is below $1.00, the agent executes both trades simultaneously in parallel, locking in the spread regardless of the event outcome. The agent is non-custodial — your capital stays on your Kalshi and Polymarket accounts at all times.

Example: Buy YES on Polymarket at $0.47 + Buy NO on Kalshi at $0.51 = $0.98 total cost, $1.00 payout at resolution = 2% profit.

## How It Works

1. The agent monitors thousands of binary event markets across Polymarket and Kalshi in real time (a streaming order-book feed on Polymarket, continuous polling on Kalshi).
2. AI-powered semantic matching (OpenAI embeddings + custom reranker with every pair validated before going live) identifies when the same real-world event is listed on both platforms — even when titles differ completely (e.g., "Fed cuts rates in May FOMC" vs "Will the Fed cut at May FOMC?").
3. When a price discrepancy creates an arbitrage opportunity (combined cost < $1.00 after fees), the agent flags it.
4. You get an instant alert with a step-by-step guide to place both legs yourself. Fully automated parallel execution (with circuit breaker auto-unwind) is in final testing and rolls out to Operator subscribers soon.
5. The trade resolves automatically when the event outcome is determined — profit is locked in at execution.

## Why Do Price Discrepancies Exist?

Polymarket and Kalshi have different liquidity pools, user bases, and fee structures. Prices diverge constantly, especially around breaking news events. The window to capture the spread is typically 30-200 seconds before market makers close it. Manual execution is nearly impossible at scale — automated agents are essential.

## Key Features

- AI-powered semantic matching across thousands of markets with every pair validated before going live
- Instant alerts with step-by-step two-leg guides (auto-execution in final testing) (P99: 340ms)
- Circuit breaker with automatic unwind on partial fills (0bps directional exposure)
- Kelly criterion position sizing for optimal bet sizing
- Kill switch for instant position exit
- Non-custodial — capital stays on Kalshi and Polymarket, never with Arbitrage Agent
- Paper trading / dry-run mode for testing before going live
- Real-time web terminal dashboard
- Telegram alerts and email digests
- No coding required — 30-minute setup

## Key Metrics

- thousands of markets monitored live
- Semantic matching with every pair validated before going live
- 340ms P99 two-leg fill latency
- managed cloud infrastructure
- 0bps directional exposure (circuit breaker ensures both-or-neither)

## Typical Returns

- Arbitrage spreads on prediction markets typically range from 1% to 6% per trade
- The agent scans markets continuously, so opportunities compound over time
- Returns depend on capital deployed, market conditions, spread thresholds, and position sizes
- Past performance is not indicative of future results
- This is not financial advice

## Pricing

All prices in USD. 0% take on P&L — flat subscription only.

### Starter — $29/month ($199/year, $299 lifetime)
- Early bird: $19/month (monthly plan only; ends 27 Oct 2026 UTC, list price applies afterwards)
- Live opportunity feed
- Dry-run P&L tracking
- Step-by-step execution guides, with maker/taker sequencing
- Mark-to-market on open positions
- 7 days history
- Web terminal access
- Dry-run only — no live execution

### Operator — $99/month ($699/year, $999 lifetime)
- Early bird: $69/month (monthly plan only; ends 27 Oct 2026 UTC, list price applies afterwards)
- Everything in Starter, plus:
- Live two-leg execution
- Kelly criterion sizing and risk caps
- Telegram alerts
- Email digest
- Directional divergence signals
- Unlimited history
- CSV export
- Priority support

### All Plans
- 0% take on P&L
- Non-custodial (capital stays on Kalshi and Polymarket)
- Cancel anytime
- Referral discount: both parties save $3/month

## Supported Platforms

Currently supports Polymarket and Kalshi. These are the two largest prediction market platforms with the most cross-market arbitrage opportunities.

## Architecture & Security

- Non-custodial: Arbitrage Agent never has withdrawal permissions. Your capital stays on your Kalshi and Polymarket accounts.
- API keys: The agent needs read + trade permissions only. It cannot withdraw funds.
- Circuit breaker: If one leg of a trade fails to fill, the other is automatically unwound to prevent directional exposure.
- Kill switch: Instantly exit all positions with one click.
- No shared wallets, no pooled funds, no custody of user assets.

## Getting Started

1. Sign up at https://arbitrage-agent.com
2. Connect your Polymarket and Kalshi accounts via API keys (read + trade only)
3. Configure risk settings (position limits, max exposure, spread threshold)
4. Start in dry-run mode to verify setup
5. Enable live trading when ready (Operator plan)

## Founder

Alex Mercer — Founder & Developer
- Background: Arbitrage Agent is a one-person project, built after repeatedly finding the same event priced differently on Polymarket and Kalshi with no existing tool that matched them reliably enough to trade on.
- X/Twitter: https://x.com/ArbitrageAgent

## Frequently Asked Questions

Q: Is prediction market arbitrage truly risk-free?
A: Pure arbitrage (buying both sides below $1.00) locks in the spread once both legs are filled. The main risks are execution risk (one leg fills, the other doesn't) and liquidity risk. Arbitrage Agent mitigates execution risk with a guide that shows both legs, exact prices and sizes in one screen; the upcoming automated execution engine adds parallel fills with a circuit breaker that auto-unwinds partial fills.

Q: Is my money safe?
A: Arbitrage Agent is non-custodial. Your capital stays on your Kalshi and Polymarket accounts at all times. We never have withdrawal permissions. You hold your own accounts and API keys.

Q: Do I need coding skills?
A: No. Arbitrage Agent is fully managed. Connect your accounts, set your risk parameters, and the agent handles everything. Setup takes about 30 minutes.

Q: How is this different from regular prediction market trading?
A: Regular trading requires predicting outcomes correctly. Arbitrage profits from the price gap between platforms, regardless of the outcome. You don't need to be right about any event.

Q: What markets does the agent scan?
A: All active binary event markets on Polymarket and Kalshi — politics, sports, crypto, economics, entertainment, and more. Currently thousands of markets monitored live.

Q: How does the AI matching work?
A: The agent uses OpenAI embeddings combined with a custom reranker to semantically match events across platforms. This handles cases where platforms name the same event completely differently. Every matched pair is additionally validated before it goes live.

Q: What if one leg of my trade doesn't fill?
A: In the automated execution engine (in final testing), the circuit breaker automatically detects partial fills and unwinds the filled leg, ensuring zero directional exposure — the "both-or-neither" guarantee. Until it ships, the guide shows both legs in one screen so you place them back-to-back.

## Blog Articles (15 guides)

- Prediction Market Arbitrage Taxes 2026: https://arbitrage-agent.com/blog/prediction-market-arbitrage-taxes
- How to Arbitrage Polymarket vs Kalshi: https://arbitrage-agent.com/blog/how-to-arbitrage-polymarket-vs-kalshi
- Prediction Market Arbitrage Strategy Guide: https://arbitrage-agent.com/blog/prediction-market-arbitrage-strategy-guide
- Polymarket vs Kalshi — Why the Same Event Has Different Prices: https://arbitrage-agent.com/blog/polymarket-vs-kalshi-same-event-different-prices
- 84% of Polymarket Traders Lose Money — Here's Why: https://arbitrage-agent.com/blog/82-percent-polymarket-traders-lose-money
- Risk-Free Trading on Prediction Markets: https://arbitrage-agent.com/blog/risk-free-trading-prediction-markets
- Best Polymarket Arbitrage Agent — Automated vs Manual: https://arbitrage-agent.com/blog/best-polymarket-arbitrage-agent
- How Much Can You Make with Prediction Market Arbitrage: https://arbitrage-agent.com/blog/how-much-can-you-make-prediction-market-arbitrage
- How to Make Money with Prediction Markets in 2026: https://arbitrage-agent.com/blog/make-money-prediction-markets-2026
- Prediction Market Arbitrage as Passive Income: https://arbitrage-agent.com/blog/passive-income-prediction-market-arbitrage
- Arbitrage Agent for Beginners — Start Earning in 30 Minutes: https://arbitrage-agent.com/blog/polymarket-kalshi-arbitrage-agent-beginners-guide
- Polymarket Kalshi Arbitrage Agent — Complete 2026 Guide: https://arbitrage-agent.com/blog/polymarket-kalshi-arbitrage-agent-2026
- Arbitrage Polymarket — How to Profit Without Predicting: https://arbitrage-agent.com/blog/arbitrage-polymarket
- How Prediction Market Arbitrage Works: https://arbitrage-agent.com/blog/how-prediction-market-arbitrage-works
- Is Prediction Market Arbitrage Legal? (2026): https://arbitrage-agent.com/blog/is-prediction-market-arbitrage-legal
- Kalshi vs Polymarket Fees, Liquidity & Arbitrage (2026): https://arbitrage-agent.com/blog/kalshi-vs-polymarket-fees-liquidity

## Competitor Comparisons

- vs ArbBets: https://arbitrage-agent.com/compare/arbbets
- vs Claw Arbs: https://arbitrage-agent.com/compare/claw-arbs
- vs ArbPoly: https://arbitrage-agent.com/compare/arbpoly
- vs Manual Arbitrage: https://arbitrage-agent.com/compare/manual-arbitrage
- vs Open Source Scripts: https://arbitrage-agent.com/compare/open-source
- vs Spreadsheet Tracking: https://arbitrage-agent.com/compare/spreadsheets
- vs OpenClaw: https://arbitrage-agent.com/compare/openclaw
- vs WhoIsSharp: https://arbitrage-agent.com/compare/whoissharp

## Glossary / Learn

Definitions of key prediction market arbitrage concepts:
- Prediction Market Arbitrage: https://arbitrage-agent.com/learn/prediction-market-arbitrage
- Spread: https://arbitrage-agent.com/learn/spread
- Two-Leg Execution: https://arbitrage-agent.com/learn/two-leg-execution
- Circuit Breaker: https://arbitrage-agent.com/learn/circuit-breaker
- Kelly Criterion: https://arbitrage-agent.com/learn/kelly-criterion
- Complement Arbitrage: https://arbitrage-agent.com/learn/complement-arbitrage
- Resolution Risk: https://arbitrage-agent.com/learn/resolution-risk
- Cross-Market Arbitrage: https://arbitrage-agent.com/learn/cross-market-arbitrage
- CLOB: https://arbitrage-agent.com/learn/clob
- Non-Custodial: https://arbitrage-agent.com/learn/non-custodial
- Kill Switch: https://arbitrage-agent.com/learn/kill-switch
- Slippage: https://arbitrage-agent.com/learn/slippage
- Binary Event Market: https://arbitrage-agent.com/learn/binary-event-market
- Event Contract: https://arbitrage-agent.com/learn/event-contract
- Market Maker: https://arbitrage-agent.com/learn/market-maker
- Liquidity Pool: https://arbitrage-agent.com/learn/liquidity-pool
- Partial Fill: https://arbitrage-agent.com/learn/partial-fill
- Directional Exposure: https://arbitrage-agent.com/learn/directional-exposure
- Dry Run: https://arbitrage-agent.com/learn/dry-run
- Stale Pricing: https://arbitrage-agent.com/learn/stale-pricing
- Implied Probability: https://arbitrage-agent.com/learn/implied-probability
- Orderbook: https://arbitrage-agent.com/learn/orderbook
- Surebet: https://arbitrage-agent.com/learn/surebet

## Market Categories

Arbitrage opportunities by market type:
- Politics: https://arbitrage-agent.com/markets/politics
- Economics (Fed, CPI, GDP): https://arbitrage-agent.com/markets/economics
- Crypto: https://arbitrage-agent.com/markets/crypto
- Sports: https://arbitrage-agent.com/markets/sports
- Entertainment: https://arbitrage-agent.com/markets/entertainment

## Free Tools

- Arbitrage Calculator: https://arbitrage-agent.com/calculator — Enter YES and NO prices to instantly see spread, net edge after fees, and profit per $100.

## Contact

- Website: https://arbitrage-agent.com
- Twitter/X: https://x.com/ArbitrageAgent
- Founder: Alex Mercer (https://x.com/ArbitrageAgent)