Polymarket Valuation Divergence Trader

Trade markets where model probability diverges from Polymarket price.

This is a template. The default uses Simmer AI consensus as your probability model. Remix it with your own model, external APIs, or custom forecasting logic. The skill handles market scanning, Kelly sizing, and safe trade execution.

When to Use This Skill

Use this when:

• You have a probability model (AI, statistical, fundamental analysis)
• You want to trade when market prices diverge from your model
• You need Kelly criterion sizing for risk management
• You want to catch structural mispricings (mergers, earnings, regulatory events)

Quick Start

Setup

1. Set your API key:

   export SIMMER_API_KEY=sk_live_...
   

2. Check config:

   python valuation_trader.py --config
   

3. Dry run (no trades):

   python valuation_trader.py
   

4. Live trading:

   python valuation_trader.py --live
   

Configuration

Update settings:

python valuation_trader.py --set edge_threshold=0.02

How It Works

1. Scan Markets

Fetches active markets from Simmer. For each:

2. Get Model Probability

Default: Simmer AI consensus from /api/sdk/context/{market_id}

To use your own model: Edit get_model_probability() function.

3. Calculate Edge

edge = model_probability - market_price

If edge > threshold: trade signal ✓

4. Kelly Sizing

kelly_fraction = edge / (1 - market_price)
kelly_fraction = min(kelly_fraction, MAX_KELLY)
position_size = kelly_fraction * bankroll
position_size = min(position_size, max_position_usd)

5. Execute Trade

• If edge > 0: Buy YES (model thinks it's underpriced)
• If edge < 0: Buy NO (model thinks it's overpriced)
• Include reasoning for transparency
• Execute with safeguards (flip-flop detection, slippage warnings)

6. Hold to Resolution

Positions held until market resolves. Check --positions to see current holdings.

Interpreting the Output

🎯 Valuation Trader Scan
   Markets scanned: 50
   Signals found: 3
   Executed: 2

📰 BTC hits $100k by EOY?
   Model: 65% | Market: 52% | Edge: +13%
   💰 BUY YES $4.50 (Kelly: 2.25 shares)

📰 Will Trump win in 2028?
   Model: 58% | Market: 71% | Edge: -13%
   💰 BUY NO $3.75 (Kelly: 2.05 shares)

Customizing Your Model

Edit get_model_probability() to use any source: