polymarket-arbitrage

What This Skill Does

The polymarket-arbitrage skill serves as a sophisticated engine for identifying and acting upon market inefficiencies within the Polymarket prediction ecosystem. It specifically targets 'math arbitrage' opportunities—scenarios where the combined probability of all outcomes in a market falls below 100%, theoretically guaranteeing a profit regardless of the event outcome. By monitoring real-time market data, it performs automated fee-adjusted calculations, risk scoring, and continuous polling to alert users to high-probability trade setups. The skill includes built-in P&L tracking and logic to handle multi-leg orders across different market outcomes.

Installation

To install this skill, use the OpenClaw command line interface:

clawhub install openclaw/skills/skills/johny0920/polymarket-arbitrage

Ensure you have the required dependencies installed in the skill directory by running pip install requests beautifulsoup4 within the module path. The tool is designed to save state information directly into a local polymarket_data/ folder, which must be write-accessible.

Use Cases

This skill is ideal for:

• Quantitative traders looking to exploit statistical mispricing in prediction markets.
• Automated strategy developers who want to integrate risk-managed arbitrage logic.
• Analysts tracking prediction market liquidity and efficiency over time.
• Users wanting to generate alerts when new, high-edge (3%+) opportunities emerge.

Example Prompts

1. "Monitor Polymarket for new math arbitrage opportunities with a minimum edge of 4% and report them to my Discord webhook."
2. "Perform a one-time scan of all active Polymarket events and summarize the top three opportunities based on risk score and volume."
3. "Show me the status of my current paper-trading monitoring loop and highlight any newly detected arbitrage setups since the last check."

Tips & Limitations

• Paper Trading First: Always run the monitor in paper-trading mode for at least 1-2 weeks. This helps you understand the frequency and 'fill' reliability of arbitrage opportunities before committing real capital.
• Risk Management: Pay close attention to the risk_score. Lower scores are safer, but high-volume markets often offer better slippage protection.
• Fee Awareness: The tool automatically deducts a 2% taker fee per leg. Ensure your calculated 'edge' accounts for this, as small errors in fee assumptions can turn a profitable trade into a net loss.
• Platform Execution: This tool focuses on detection and monitoring. While it provides the strategy, actual order execution should be handled cautiously, respecting Polymarket's liquidity constraints and account limits. Do not ignore the warning regarding selling all outcomes, as this requires higher collateral requirements.