How Bundle Arbitrage Works on Polymarket
A "bundle" on Polymarket is a YES share and a NO share of the same event. Together, they always resolve to exactly $1.00 — one of them pays out $1, the other $0. If you can buy both for less than $1.00 total, you have a guaranteed profit regardless of outcome.
The basic mechanic
Every binary prediction market has two sides: YES and NO. At settlement, one pays $1.00 and the other pays $0.00. The combined value of YES + NO is always exactly $1.00 at settlement.
Event: "Will the Fed cut rates in June?"
YES bid: $0.47
NO ask: $0.51
Bundle cost: $0.98
Guaranteed return at settlement: $1.00
Risk-free profit: $0.02 per bundle (2%)
Why these opportunities exist
Bundle arb opportunities arise from market inefficiency — specifically, the bid-ask spread and order book depth. When a large order moves the NO side up while the YES side hasn't adjusted, a temporary gap opens. On low-liquidity markets, these gaps can persist for hours.
They're more common on:
- Low-volume markets (less arbitrage pressure)
- Contracts near settlement (higher bid-ask spreads)
- Volatile news events (rapid price moves create temporary gaps)
The risks
Bundle arb looks risk-free but has practical constraints:
- Liquidity — the opportunity may not be fillable at the prices you see. Trying to fill a large position moves the price against you.
- Settlement risk — Polymarket has settled contracts incorrectly in rare cases. "Guaranteed" is conditional on proper settlement.
- Capital lock-up — your capital is locked until settlement, which may be months away.
- Fees — Polymarket charges fees on trades that eat into small margins.
How to find them
Manually: browse Polymarket markets and calculate YES ask + NO ask for each contract. Any sum below $1.00 is a potential opportunity.
Programmatically: use Polymarket's Gamma API (gamma-api.polymarket.com, not the CLOB) to fetch market prices. The outcomePrices field returns a JSON-encoded string — double-parse it.
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