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Prediction-market arbitrage starts with complementary payouts, not similar headlines. If one position pays $1 when an event occurs and another pays $1 when that same event does not occur, their combined payout can be $1. The trade only has a positive locked-in arithmetic margin if both legs fill at a combined cost below that payout and all relevant settlement conditions match.
A quoted price gap is a candidate for investigation. Fees, available depth, unmatched fills, currency conversion and different resolution rules can remove the apparent advantage.
A two-leg example
Suppose you can actually buy 100 Yes contracts at 56¢ and 100 complementary No contracts at 40¢. These hypothetical positions cost $96 before other costs. If the contracts are exact complements and pay a combined $100 in every applicable outcome, the gross difference is $4.
| Total extra costs | Combined spend | Net difference against $100 payout |
|---|---|---|
| $0 | $96 | +$4 |
| $3 | $99 | +$1 |
| $5 | $101 | −$1 |
The $100 payout is an assumption to prove from the contracts. This is an arithmetic illustration, not an observed opportunity or a return forecast.
Prices must be executable
Use the buying price for each actual size, not a last trade or midpoint. Polymarket US explains that market buys use asks and market sales use bids, with execution depending on available size. International Polymarket has a separate product and rule set; verify the venue you can access.
Use the slippage calculator to understand weighted fills. A top price available for five contracts does not establish your cost for 100. Check Kalshi fees and Polymarket fees separately at the point of execution.
Prove that the outcomes complement each other
- Compare the exact event definition, threshold and observation period.
- Match the designated resolution source and time zone.
- Read correction, cancellation and unusual-payout provisions.
- Confirm currency and payout units.
- Write down the combined payout for every outcome allowed by both rule sets.
A Yes contract based on a preliminary report and a No contract based on a final report can both lose if the report changes. Similar titles are insufficient evidence of a hedge.
The first fill can leave you exposed
If only the 100 Yes contracts at 56¢ fill, you have spent $56 on a directional position. You have not secured the assumed $100 combined payout. Buying the No leg later for 48¢ raises total spend to $104 before costs, removing the original margin.
Kalshi's limit-order guidance explains that setting a price does not guarantee a fill. Across separate venues, matching one order does not atomically complete the other.
Use a repeatable research worksheet
Record both tickers, complete rules, quote timestamps, executable size, total costs and a plan for an unmatched leg. Continue with the contract-equivalence checklist and scenario worksheet. That page focuses on validating a candidate; this page explains the basic mechanism.
Alphascope's market research can help locate contracts to investigate. It does not establish that a price gap is executable or guarantee returns. Source links checked October 6, 2026.