What is prediction market arbitrage?
Arbitrage is when you exploit price differences between two markets for a guaranteed profit. If Polymarket prices an event at 62% YES and Kalshi prices the same event at 65% YES, the NO prices are 38¢ and 35¢ respectively. Buying YES on Polymarket (62¢) and NO on Kalshi (35¢) costs 97¢ total, but one side is guaranteed to pay $1 — a 3¢ risk-free profit per share.
Is prediction market arbitrage legal?
In most jurisdictions, yes. Polymarket operates on blockchain (Polygon) and is available globally (with some restrictions). Kalshi is a CFTC-regulated exchange in the US. Check your local regulations, especially regarding event contracts and prediction markets.
How much can I make from prediction market arbitrage?
Typical arbs are 1-5% per trade. On a $10,000 bankroll, a 3% arb nets $300. The key is volume and speed — serious arb traders automate scanning and execution, running many small arbs per day.
What's the difference between Polymarket and Kalshi?
Polymarket is a decentralized prediction market on Polygon (crypto-native, USDC deposits, global access). Kalshi is a centralized, CFTC-regulated exchange (USD deposits, US-focused). Different user bases = different prices = arbitrage opportunities.
Can I use this calculator for other prediction markets?
Absolutely. The math works for any two binary outcome markets: PredictIt, Manifold, Metaculus (if they add real-money markets), or even sports betting exchanges. Just enter the YES prices from each platform.