Prediction markets · Guide

Prediction market arbitrage

On a prediction market, the winning outcome pays exactly $1. If you can buy every outcome for less than that, after fees, the difference is yours whichever way the question goes. Here are the three ways it happens, with worked numbers.

Updated October 16, 2026 · Fees checked against Kalshi's and Polymarket's documentation

How it works

A prediction market contract pays $1 if its outcome happens and nothing if it doesn't, so its price in cents is the market's probability. Exactly one outcome of a question wins. That gives a simple test:

arbitrage exists when the cost of every outcome, after fees, is below $1

Buy one contract of each outcome for 96¢ in total, and you collect $1 whatever happens: 4¢ of profit per set. The gap usually appears because the same question trades in different places, at different speeds, with different traders.

01Across platformsYES on Kalshi, NO on Polymarket, on the same question. 02Against a sportsbookA Kalshi contract on one team, a sportsbook bet on the other. 03Within one marketEvery outcome of a multi-outcome question for under $1.

1. Kalshi vs Polymarket

Many questions, especially big games, trade on both Kalshi and Polymarket. When YES on one platform plus NO on the other costs less than $1, every pair pays $1.

Worked example · Same game, two platforms

YES "Team A wins" on Kalshi: 200 × 45¢$90.00

Kalshi fee: 0.07 × 200 × 0.45 × 0.55, rounded up$3.47

NO "Team A wins" on Polymarket: 205.13 shares × 50¢$102.57

Polymarket sports fee, taken in shares (2.5% at 50¢)−5.13 shares

Total cost for 200 pairs (98.02¢ each)$196.04

Locked-in profit+$3.96 (2.02%)

The two platforms charge different rates, and Polymarket takes its fee in shares on a buy, so you buy a few extra shares to end up with the same number on each side. Our Kalshi arbitrage calculator does this for you, and Kalshi vs Polymarket compares the two platforms in full.

2. Prediction market vs sportsbook

Kalshi and Polymarket list game-winner markets on most major sports. A sportsbook prices the same game in odds. Turn the contract price into odds (1 / price, after the fee) and compare it with the sportsbook's price on the other team.

Worked example · Kalshi and a sportsbook

Kalshi "Team B wins": 200 contracts × 52¢$104.00

Kalshi fee, rounded up$3.50

Sportsbook, Team A at 2.25: $200 / 2.25$88.89

Total cost$196.39

Payout either way$200.00

Locked-in profit+$3.61 (1.8%)

This pairing has one big advantage for US bettors: Kalshi trades against other users and doesn't limit winning customers, so it can carry the leg that a sportsbook might otherwise restrict. More in the Kalshi arbitrage guide.

3. Multi-outcome markets

Some questions have several outcomes, such as which of three candidates wins, or which range a number lands in. If the outcomes cover every possibility and only one can win, buying YES on all of them pays exactly $1. When the YES prices add up to well under $1, that is an arbitrage within a single market.

Worked example · One question, three outcomes, 100 sets on Kalshi

YES on outcome 1: 100 × 28¢, fee $1.42$29.42

YES on outcome 2: 100 × 31¢, fee $1.50$32.50

YES on outcome 3: 100 × 33¢, fee $1.55$34.55

Total cost (96.47¢ per set)$96.47

Payout, whichever outcome wins$100.00

Locked-in profit+$3.53 (3.7%)

Notice what fees do here: three legs means three fees. If the same three outcomes were priced at 30¢, 33¢ and 33¢, the raw total of 96¢ looks like a 4% gap, but the fees add 4.57¢ and the set costs more than $1. A multi-outcome gap needs to be wider than a two-way one to survive.

Make sure the outcomes really cover everything. Read the rules for an "other" or "none of the above" result, a tie, or a cancelled event. If any result can happen that none of your contracts covers, you are not fully hedged.

Fees decide the trade

Kalshi and Polymarket both charge takers a fee of rate × contracts × price × (1 − price): highest at 50¢ and lower toward the extremes. On sports, Kalshi's standard rate is 0.07 (MLB 0.035) and Polymarket's international rate is 0.05. Near 50¢, that is roughly 2% to 4% of what you pay on each leg, which is about the size of a typical gap.

Always compare prices after fees. A 3% gap on raw prices can be a loss once both legs are charged.
Maker orders are cheaper. Resting orders are free on Polymarket and on most Kalshi series, but they may not fill, which can leave you holding one leg.
Small orders pay more on Kalshi, because each fill's fee is rounded up to the next cent. See Kalshi fees explained.

Risks and checks before every trade

Settlement rules. Both sides must resolve the same way: the same source, deadline, and treatment of overtime, postponements and ties. Kalshi settles under each market's written rules; Polymarket's international platform uses the UMA oracle, where disputed results go to a token-holder vote.
Leg risk. Prices move. Place the leg that is most likely to move first, and if the second price changes before it fills, recheck the numbers; the hedge bet calculator shows what you can still lock in.
Order book depth. The price you see may only be available for a few contracts. Check how many are on offer at that price before you size the trade.
Money locked until settlement. A market that settles in months ties up your money. Kalshi pays variable interest (3.50% APY in October 2026) on cash and open positions for balances of $250 or more, which softens this on that side.
Funding costs. Card deposits on Kalshi cost up to 2%, and Polymarket's international platform runs on crypto. Fund by bank transfer where you can.

Tools

Most sportsbook arbitrage scanners don't cover prediction markets yet. RebelBetting, for example, told us in October 2026 that it doesn't fetch Kalshi or Polymarket odds so far. Many traders compare prices by hand on the questions they follow, and some build their own scripts on the platforms' public data. Whatever finds the gap, check it with a calculator before you trade:

Kalshi arbitrage calculator: Kalshi vs a sportsbook or Polymarket, with both platforms' real fees.
Odds converter: turn a contract price into American, decimal or fractional odds.
Arbitrage calculator: sportsbook-only arbs, including 3-way markets.

Found a gap? Check it after fees.

Open the Kalshi calculator

FAQ

What is prediction market arbitrage?

Buying every outcome of a question, on one platform or across several, for less than the $1 that the winning outcome pays. Because exactly one outcome wins, the profit is locked in whichever way the question resolves, as long as both sides settle by the same rules.

Can you arbitrage Kalshi and Polymarket?

Yes. Buy YES on one platform and NO on the same question on the other. If the pair costs less than $1 after both platforms' fees, every pair pays $1. Polymarket takes its buy fee in shares, so you buy slightly more shares than you need to keep.

How big are prediction market arbitrage margins?

Usually small: a few percent before fees. Taker fees on Kalshi and Polymarket can take 2% to 4% of a trade near 50 cents, so a gap has to be wider than the fees on every leg to be worth taking.

Do arbitrage scanners cover Kalshi and Polymarket?

Most sportsbook scanners don't yet. RebelBetting, for example, told us in October 2026 that it does not fetch odds from Kalshi or Polymarket. Many traders compare prices themselves, or build their own tools on the platforms' public data.

What are the risks of prediction market arbitrage?

Different settlement rules on the two sides, prices that move before your second order fills, thin order books, fees you forgot to count, and money locked up until the market settles.

For educational purposes only. This is not financial advice. Examples assume every order fills at the prices shown. Fees, interest rates and markets change; confirm them on each platform before you trade. Trade only where it is legal for you, and only with money you can afford to lose.