Prediction Market Math
HEDGING TERMINAL // CROSS-VENUE DISLOCATION

Cross-Market Arbitrage Scanner — Binary Spread & Risk-Free Edge

Scan binary prediction market discrepancies across venues. Calculate synthetic risk-free spreads, fee-adjusted profit margins, and optimal dual-leg capital sizing.

Market Dislocation Scenarios:

CROSS-PLATFORM LEG PARAMETERS ACTIVE

$0.54
$0.01 $0.50 $0.99
$0.41
$0.01 $0.50 $0.99
1.0%
0.0% 2.5% 5.0%
$
COMBINED BASKET COST
$0.95
GROSS ARBITRAGE SPREAD
+5.0¢ (5.0%)
GUARANTEED NET PROFIT
+$42.11
NET RISK-FREE ROI
+4.21%

Optimal Dual-Leg Capital Allocation

Platform A Stake (Yes Contracts): $568.42 (Platform A Yes)
Platform B Stake (No Contracts): $431.58 (Platform B No)
Matched Share Volume (Both Legs): 1,052 shares per leg
Guaranteed Gross Resolution: $1,052.63 on $1,000 risk
STATUS: ARBITRAGE OPPORTUNITY CONFIRMED — Dual-leg execution locks in guaranteed positive expectation. Ensure order book depth on both platforms accommodates target share volume.

Frequently Answered Questions

How does cross-market prediction arbitrage work?

When Platform A prices an event Yes at 54¢ and Platform B prices No at 41¢, purchasing both contracts costs 95¢ for a guaranteed payout of $1.00 regardless of the real-world outcome, locking in a +5.26% risk-free gross return.

Why do binary outcome discrepancies persist across platforms?

Prediction markets suffer from fragmented liquidity, deposit/withdrawal friction, differing geographical regulatory barriers, and venue-specific user demographic biases (e.g. crypto native vs retail US).

What operational risks threaten binary arbitrage?

Key execution risks include resolution rule discrepancies between venues, withdrawal delays, platform trading fees, and execution slippage if limit orders do not fill simultaneously.