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Polymarket Binary Hedging Arbitrage: From Concept to Live Execution

Polymarket Binary Hedging Arbitrage: From Concept to Live Execution

via Dev.toDream

I. The Binary Market Structure of Polymarket Polymarket is a prediction market where each question has only two possible outcomes — Yes or No, Up or Down, Win or Lose. Take the BTC 15-minute price contract as an example. In each round, there are two contracts: Up and Down. The bet is whether BTC's closing price after 15 minutes will be higher or lower than the opening price. If your side is correct → it pays $1 If your side is wrong → it pays $0 This market has an extremely special property: The probabilities of the two outcomes must sum to 100%. Therefore, the price of Up plus the price of Down should theoretically equal exactly 1. This property does not exist in ordinary futures markets. It provides us with a natural deterministic anchor. II. Core Arbitrage Logic: Finding Certainty in Uncertainty Quantitative trading essentially does one thing: find relatively certain opportunities in an uncertain market. The binary structure of Polymarket provides such an anchor: No matter whether B

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