Prediction Markets Arbitrage Finder

Prediction markets are exchange-traded contracts that resolve YES or NO based on a real-world event outcome. Prices range from 0 to 100 cents and represent the collective implied probability of the event happening. They function like financial exchanges — buyers and sellers set prices through continuous trading, and the price reflects the aggregated information of all participants.

In jurisdictions where the underlying prediction market is legal, arbitrage between two such venues is not separately prohibited. Kalshi operates under CFTC oversight as a designated contract market in the United States, making it the first federally regulated prediction market exchange. Polymarket is a decentralised platform and its US legality is less settled — it has faced regulatory attention. Verify the legal status in your specific jurisdiction before participating.

Kalshi is a US-regulated centralised exchange offering event contracts under CFTC oversight. It requires identity verification and uses USD. Polymarket is a decentralised prediction market running on Polygon, using USDC. It does not require identity verification in the same way but has faced scrutiny in the United States. Polymarket tends to have higher liquidity on global political and macro events; Kalshi has regulatory certainty for US participants.

No. Unlike textbook two-outcome sports arbitrage where both legs settle simultaneously, prediction market arbs carry resolution risk (disputes about how a contract resolves), liquidity risk (you cannot always fill both legs at quoted prices), fee risk (fees can erase the nominal edge), and counterparty/platform risk (smart contract bugs, regulatory action). The mechanics resemble arbitrage but the risk profile is different from pure sports arbing.

The practical minimum depends on fees. On a Kalshi-Polymarket arb with 2% nominal edge and 1.5% combined fees, the net edge is 0.5%. On a $500 position that is $2.50 gross profit — barely worth the execution effort. A working position size for prediction market arbs is $1,000–$5,000 per trade at edges above 1% net of fees. Below these levels, the dollar return per trade does not justify the operational complexity.

Kalshi charges fees on profitable trades — the fee is taken as a percentage of winnings when a contract resolves in your favour. Fee tiers vary by market type and trading volume; higher-volume traders receive lower rates. Always check the current published fee schedule before calculating any edge, as fees change. Do not use outdated fee figures in your edge calculations.

Polymarket uses a central limit order book (CLOB) on some markets and an automated market maker (AMM) on others. CLOB markets have bid-ask spreads; AMM markets have price impact based on pool depth. Gas fees on the Polygon network are small but non-zero. For large positions on shallow AMM pools, slippage is the primary cost — the actual fill price diverges from the quoted price as your order moves the market.

You would need to simultaneously monitor Kalshi's market prices and Polymarket's prices for the same event, compare the implied probabilities, subtract fees, and check if the combined cost of both sides is below 100 cents. In practice, markets move fast enough that manual scanning misses most windows. Dedicated finder tools or an API feed are the practical approach for consistent monitoring.

PredictionHunt aggregates live odds across six prediction-market venues — Kalshi, Polymarket, PredictIt, ProphetX, Opinion, and Predict.fun — and matches equivalent markets. Its arbitrage scanner surfaces cross-venue mispricings in real time, alongside a smart-money feed and fee/EV calculators. The web tools are free; a unified API adds arbitrage and +EV signals on tiers from Free ($0) to Dev ($49/mo) and Pro ($249/mo). Verified June 2026.

The Polymarket-Kalshi Arbitrage API Finder is a programmatic data tool hosted on Apify that delivers Kalshi and Polymarket arb opportunity data via API. It is designed for developers who want to build custom alerting systems, logging pipelines, or automated execution layers on top of the raw arbitrage data. The fpr=hxiycz referral parameter in the link is an affiliate referral — costs you nothing extra but may earn Arbing Edge a commission.

On highly liquid markets (major election contracts, Fed decisions with thousands of participants), mispricings can close in under 60 seconds once other traders see them. On thinner markets with fewer participants, windows can persist for minutes or longer. The practical implication: manual execution requires you to have both venues open and ready. Automated detection and placement via API is more reliable for liquid markets.

Yes, where the same event is listed on both. A sporting event result priced on Kalshi as a YES/NO contract can in theory be combined with a sportsbook moneyline on the same game. The challenge is that sportsbook and prediction market pricing conventions differ (decimal/American odds vs 0-100 cent contracts), and the exact outcome definitions may not match perfectly. Careful contract term comparison is essential before treating them as equivalent sides of the same event.

For Polymarket, yes. Polymarket runs on the Polygon blockchain and requires a USDC balance in an Ethereum-compatible wallet (or Polymarket's custodial option). You need to acquire USDC, bridge it to Polygon, and connect your wallet. Kalshi operates in USD via standard bank transfer or debit card, with no crypto wallet required. If you are not comfortable with self-custody crypto, Kalshi-only or Kalshi-sportsbook arbs avoid the wallet requirement.

Both platforms primarily list major US and global political events, economic indicators (CPI, Fed funds rate), and technology milestones. Sports event coverage is secondary and more limited than dedicated sportsbooks. Kalshi has listed some US sports contracts; Polymarket has covered major championship outcomes. Coverage expands and contracts over time — check each platform's active markets for current availability.

For a two-outcome event: buy YES on Venue A at price P_A cents and NO on Venue B at price P_B cents. Total cost = P_A + P_B cents. If P_A + P_B < 100, the raw margin = 100 - (P_A + P_B) cents per $1 of combined position. Subtract fees: net margin = raw margin - (Kalshi fee on winning leg + Polymarket spread/gas on both legs). If net margin > 0, a real edge exists. Use the free arbitrage calculator at /examples/ to compute stake splits.

Kalshi imposes position limits on certain market types, particularly political and macro markets, as part of their CFTC-compliant risk management framework. The exact limits vary by market and may change. Large positions approaching the limit may need to be split across multiple contracts or markets. Check Kalshi's current position limit documentation before sizing a large trade.

The most common errors are: not accounting for fees in the edge calculation (a nominal 2% edge that costs 1.8% in fees is barely viable); mismatching contract terms (assuming two differently-worded contracts resolve identically when they may not); filling one leg without confirming the other is still available at the expected price; ignoring resolution risk on ambiguously worded contracts; and underestimating slippage on shallow Polymarket pools.

Tax treatment of prediction market contract gains is jurisdiction-specific and unsettled in many markets. In the United States, there are open questions about whether Kalshi contracts are treated as section 1256 contracts (60/40 capital gains treatment) or as ordinary income. Polymarket gains may be treated as capital gains on cryptocurrency. This is not tax advice — consult a qualified tax professional familiar with derivatives and cryptocurrency before withdrawing significant profits.

Kalshi operates as a CFTC-designated contract market (DCM) as of its approval in 2023, making it the first federally regulated prediction market in the United States. Kalshi has faced legal challenges from the CFTC over certain market types (notably US congressional election contracts — a federal court ruled in Kalshi's favour in 2024). The regulatory environment continues to develop. All regulatory status claims should be verified against current sources — this information was accurate as of early 2026.

Yes. Both Kalshi and Polymarket offer programmatic access via API (Kalshi REST API; Polymarket CLOB API for the central order book). The Apify API Finder tool provides a convenient wrapper for arb detection. Full automation — where detected arbs are placed without manual confirmation — is technically feasible but introduces execution risk (a partially filled position if the window closes mid-trade) and regulatory questions around algorithmic trading on CFTC-regulated venues. Proceed carefully and understand the terms of service.