Prediction Markets Arbitrage: Complete Guide to Risk-Free Profits (2026)

TL;DR

Prediction market arbitrage exploits price differences between platforms like Polymarket, Kalshi, and Opinion. When the same event trades at different prices, you can bet both sides to guarantee profit regardless of outcome. Example: Venezuela leadership change offers 5.26% ROI by buying No on Kalshi (89¢) and Yes on Polymarket (6¢) for a total cost of 95¢ with guaranteed $1 payout. ArbBets scans 990+ markets daily to find these opportunities automatically.

What is Prediction Markets Arbitrage?

Prediction market arbitrage is a trading strategy that guarantees profit by exploiting price differences between platforms. When two prediction markets price the same event differently, you can buy contracts on both sides so that you win no matter what happens.

Unlike sports betting or gambling, pure arbitrage carries no risk—your profit is locked in the moment you place both trades.

Why Do Price Differences Exist?

Different prediction markets attract different traders with different information:

• Geographic differences: Kalshi is US-only while Polymarket serves international traders
• User base: Crypto-native traders on Polymarket vs traditional finance users on Kalshi
• Liquidity: Smaller platforms adjust prices slower
• Information flow: News reaches different platforms at different speeds
• Market structure: Different fee structures and position limits create pricing inefficiencies

These factors create persistent arbitrage opportunities averaging 4-7% ROI.

How Prediction Market Arbitrage Works

The Basic Math

Prediction markets sell contracts priced between $0 and $1. A contract pays $1 if the event happens, $0 if it doesn't.

For every event, there's a Yes contract and a No contract. In an efficient market:

• Yes price + No price = $1.00

But when prices differ between platforms:

• Platform A: Yes = 60¢, No = 40¢ (total: $1.00)
• Platform B: Yes = 55¢, No = 45¢ (total: $1.00)

You can buy Yes on Platform B (55¢) and No on Platform A (40¢):

• Total cost: 55¢ + 40¢ = 95¢
• Guaranteed payout: $1.00 (one contract always wins)
• Profit: 5¢ = 5.26% ROI

Real Example: Venezuela Leadership Change

Arbitrage Trade:

• Buy "No" on Kalshi: 89¢
• Buy "Yes" on Polymarket: 6¢
• Total cost: 95¢
• Payout: $1.00 guaranteed
• Profit: 5¢ per contract = 5.26% ROI

If Maduro leaves, your Polymarket Yes pays $1. If he stays, your Kalshi No pays $1. You profit either way.

Step-by-Step Arbitrage Process

Step 1: Set Up Accounts

Create and fund accounts on multiple platforms:

• Polymarket: Requires crypto wallet with USDC
• Kalshi: Bank transfer or debit card (US only)
• Opinion: Similar to Polymarket, crypto-based

Keep funds ready on all platforms—arbitrage opportunities disappear quickly.

Step 2: Find Opportunities

Scan markets for price discrepancies. For each event:

1. Find the same market on multiple platforms
2. Add the cheapest Yes price + cheapest No price
3. If total < $1.00, arbitrage exists
4. Calculate ROI: (($1 - total) / total) × 100

Manual scanning is slow—use tools like ArbBets to automate this.

Step 3: Calculate Position Sizes

To maximize profit, bet proportionally:

If Yes costs 40¢ and No costs 55¢:

• Total cost: 95¢ for $1 payout
• Bet equal dollar amounts: $100 on each side
• Total investment: $200
• Contracts owned: 250 Yes + 182 No
• Guaranteed profit: ~$10.50 (5.26% of $200)

Step 4: Execute Quickly

1. Open both platforms simultaneously
2. Place the less liquid trade first (usually Kalshi)
3. Immediately place the second trade
4. Verify both orders filled at expected prices

Step 5: Wait for Settlement

Once both trades execute, your profit is locked. Wait for the event to resolve and collect your payout.

Platforms for Prediction Market Arbitrage

Polymarket

• Type: Decentralized, crypto-based
• Access: International (US restricted)
• Fees: 0% trading fees
• Liquidity: Highest volume
• Markets: 1,000+ (politics, crypto, sports, entertainment)

Kalshi

• Type: CFTC-regulated exchange
• Access: US only (fully legal)
• Fees: 0-1% per trade
• Liquidity: Medium
• Markets: 500+ (events, economics, politics)

Opinion

• Type: Newer platform, crypto-based
• Access: International
• Fees: 0%
• Liquidity: Growing
• Markets: 200+ (often different pricing from Polymarket)

For a detailed comparison, see our Polymarket vs Kalshi guide.

Risk vs Reward Analysis

Expected Returns

Based on ArbBets data across 990+ markets

Common Mistakes to Avoid

1. Not Accounting for Fees

Kalshi charges 0-1% per trade. A 3% arb becomes 1% after fees. Always calculate net profit.

2. Slow Execution

Prices move fast. If you take 2 minutes between trades, the opportunity may vanish. Have both platforms open and ready.

3. Ignoring Liquidity

Order books matter. A $10,000 arb means nothing if only $500 of liquidity exists. Check depth before trading.

4. Wrong Contract Matching

Ensure you're trading the exact same event. "Trump wins 2024" vs "Trump wins popular vote" are different markets.

5. Forgetting About Settlement Time

Your capital is locked until the event resolves. A 5% arb on a 2028 election ties up funds for years.

6. Overleveraging

Don't put all funds in one arb. Spread across multiple opportunities to manage platform and execution risk.

Tools for Finding Arbitrage

Manual Method

1. Open multiple platforms in browser tabs
2. Compare prices for matching markets
3. Calculate arb percentage
4. Execute trades

Pros: Free Cons: Time-consuming, miss most opportunities, prone to errors

Arbitrage Finder Tools

Automated scanners like ArbBets continuously monitor all markets and alert you to opportunities.

Pros: Find 70-100 opportunities daily, real-time alerts, accurate calculations Cons: Subscription cost

Spreadsheet Tracking

Build your own tracker with API data from each platform.

Pros: Customizable, free Cons: Requires technical skills, maintenance burden

Frequently Asked Questions

How much can I make with prediction market arbitrage?

Returns depend on capital and opportunity frequency. With $5,000 across platforms, expect $150-350/month capturing available opportunities. Returns scale with bankroll.

Is this the same as sports betting arbitrage?

Similar concept, different markets. Prediction markets cover politics, economics, and events beyond sports. The math is identical—exploit price differences for guaranteed profit.

Do I need to predict outcomes correctly?

No. That's the beauty of arbitrage—you profit regardless of what happens. You're exploiting pricing inefficiency, not making predictions.

What's the minimum to start?

You can start with $200-500 split across platforms. Smaller bankrolls limit which opportunities you can capture profitably after fees.

How long until I see profits?

Profits are instant once trades execute, but funds stay locked until event resolution. Political markets may take months; Fed decisions resolve within days.

Will platforms ban me for arbitrage?

Prediction markets generally welcome arbitrage traders—you're providing liquidity and price discovery. Unlike sportsbooks, they don't limit winning accounts.

Start Finding Arbitrage Today

Manual hunting is inefficient. By the time you find an opportunity, it's often gone. ArbBets scans 990+ markets across Polymarket, Kalshi, and Opinion in real-time, delivering actionable opportunities to your dashboard.