Buy YES and NO for less than a dollar. One of them pays out a dollar. Keep the difference.

Trevor Lasn

Prediction market arbitrage exploits pricing inefficiencies on platforms like Polymarket and Kalshi. When YES and NO contracts on the same event sum to less than $1.00, buying both guarantees profit regardless of outcome. The gap exists due to new information, low liquidity, or cross-platform differences. While individual profits are small (e.g., $0.03 per pair), they scale linearly and are risk-free. However, fees, slippage, execution speed, and liquidity constraints limit profitability for manual traders. Most successful arbitrage is automated, with bots monitoring hundreds of markets simultaneously to capture fleeting opportunities.

How Prediction Market Arbitrage Works (Polymarket, Kalshi)