Prediction markets price the future. When two platforms disagree on the same outcome, you lock in the spread. No opinions. No forecasting. Just arbitrage.
Prediction markets let you trade on real-world outcomes — elections, Fed rate decisions, sports results, weather events, even whether a CEO gets fired. Platforms like Polymarket, Kalshi, and PredictIt each price these outcomes independently.
Here's the play: when Platform A prices "Yes" at 42 cents and Platform B prices "No" at 53 cents, you've found an arb. Buy both sides for 95 cents total, and one of them pays out $1.00. That's 5 cents of guaranteed profit per dollar risked — regardless of what actually happens.
This is the same mathematical principle behind matched betting. You're not predicting anything. You're exploiting the gap between two prices. The outcome doesn't matter — you profit either way.
The same math, different markets. Four steps to lock in the spread.
Let's say two platforms are pricing the question: "Will the Fed cut rates in June 2026?"
The returns per trade are smaller than matched betting, but the volume scales differently. Prediction markets run 24/7, new events resolve constantly, and the capital requirements are flexible. Stack enough small edges and it compounds.
You need accounts on at least two platforms to arb. Each has different markets, fee structures, and regulatory status. Here's the breakdown.
Arb opportunities show up most often when:
Prediction arb is lower risk than traditional trading, but it's not zero risk. Understand these factors.
Kalshi charges ~10% on profits, PredictIt charges 10% on profits + 5% on withdrawals. Always factor fees into your arb calculation before placing trades.
Your money is tied up until the event resolves. A market that resolves in 6 months locks your capital for 6 months, even if the per-contract return is solid.
Platforms occasionally resolve ambiguous outcomes differently. If Platform A says "Yes" and Platform B says "No" on the same event, both sides could lose. Stick to clear-cut binary questions.
Kalshi is CFTC-regulated. Polymarket uses crypto and may not be available everywhere. PredictIt has position limits. Know the rules before you fund accounts.
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