Beta
    Arbitrage
    Contract Wording
    Settlement Risk

    Is This Real Prediction Market Arbitrage, or Just a Contract Mismatch?

    Most viral arbitrage screenshots are really contract mismatch screenshots. Before you trade, compare contract wording, deadline, settlement equivalence, fees, execution depth, and capital lockup.

    Quick answer

    If the wording, deadline, or settlement source differs, you are not looking at true arbitrage. Same headline does not mean same contract.

    Most cross-platform spread screenshots are not risk-free arbitrage.
    If the source or cutoff differs, you are not hedged.
    True arbitrage is rare. Fake arbitrage is everywhere.

    Run the 5-point mismatch check first

    Before you call a spread arbitrage, confirm the contract, timing, source, fees, and execution reality.

    Checklist verified: 2026-05-07

    Check 1

    Contract wording

    Do both platforms define YES with the same event language?

    If this fails

    If not, this is probably contract mismatch, not arbitrage.

    Check 2

    Deadline and timezone

    Do both markets close on the same timestamp and timezone?

    If this fails

    A timing mismatch can create a fake spread.

    Check 3

    Settlement source

    Do both markets rely on the same source or authority to resolve?

    If this fails

    Different sources can produce different valid outcomes.

    Check 4

    Fees and execution friction

    Does the spread survive fees, slippage, and transfer friction?

    If this fails

    If not, the spread is not economically real.

    Check 5

    Execution reality

    Can you fill both sides before either market moves?

    If this fails

    If not, you are taking directional risk, not locking arbitrage.

    Check 6

    Capital lockup and time value

    How long is both-leg capital tied up, and does the remaining edge still beat the time value of cash?

    If this fails

    If the apparent return only works because capital is stuck until a distant settlement, it may be a yield trade, not clean arbitrage.

    Check 7

    Settlement equivalence

    If one platform resolves YES, is the other contract forced to resolve NO/YES the same way under its own rules?

    If this fails

    If each platform can validly resolve differently, the hedge can fail even when the real-world headline looks identical.

    Can I hedge a Kalshi/Polymarket spread by buying Yes on one and No on the other?

    Before you hedge a Kalshi/Polymarket spread, ask whether it is the same bet.

    A price gap is not enough. Compare the contract terms, resolution source, deadline, fees, order book depth, and capital lockup before calling it arbitrage.

    Same headline is not enough. The two contracts need to be settlement-equivalent: if one platform can validly resolve differently under its own rules, this is not clean arb.

    Check before trading

    1. 1Open both contract pages side by side.
    2. 2Copy the exact question language and settlement source from each page.
    3. 3Compare the deadline, timezone, and any edge-case clauses.
    4. 4Check whether both legs can fill at the displayed prices.
    5. 5Estimate how long capital stays locked if both legs fill.
    6. 6Classify the spread as clean hedge, contract mismatch, fee artifact, execution risk, or yield/capital-lockup trade.

    What this is not proof of

    • a guaranteed profit
    • a broken market
    • platform mispricing by itself
    • free money just because one side appears cheaper
    Full arbitrage explainerSettlement comparisonWhy markets disagreeFees and vig

    Real arb vs fake arb

    The decision is not whether the screenshot looks exciting. The decision is whether both sides are actually the same bet.

    Closer to real arbitrage

    • Same event wording across both markets
    • Same settlement source or authority
    • Same deadline and timezone cutoff
    • Spread still survives fees and transfer friction

    Fake arbitrage / contract mismatch

    • One contract says by June 30 while another says in June
    • One platform resolves on AP and another waits for certification
    • The spread disappears after fees, slippage, or moving capital
    • You cannot fill both sides before one market reprices

    Example: the screenshot looks clean, the contracts are not

    Imagine a Kalshi vs Polymarket screenshot where both headlines appear to ask the same question and the price gap looks huge. The trap is that the headline is only the teaser.

    Under the hood, one market might ask whether something happens by June 30, while the other asks whether it happens during June. Or one may resolve from an AP call while the other waits for certification. That is not free money. That is a fake spread created by different contracts hiding under similar labels.

    If you do not inspect the contract language first, you can think you built a hedge when you actually opened two different directional bets.

    What the page is trying to stop

    Calling every cross-platform spread arbitrage.

    Trusting the headline instead of the resolution language.

    Ignoring deadline mismatch, settlement-source mismatch, or execution friction.

    Confusing a screenshot with a guaranteed edge.

    Why retail arbitrage breaks

    Even when a spread looks promising, retail execution usually fails in the ugly places that the screenshot hides.

    The market moves first

    You start filling one side, the other reprices, and your supposed hedge becomes directional risk before you finish.

    Fees and spread matter

    The gross difference can die once you add trading fees, slippage, and the cost of moving money where it needs to be.

    Capital gets trapped

    Even if both legs fill, your money may sit tied up until settlement, which changes the real economics of the trade.

    Resolution mismatch is lethal

    If the contracts resolve under different rules, your hedge can fail even when both headlines looked equivalent on day one.

    A long-dated sure thing can be a yield trade, not arbitrage.

    If a contract looks almost certain but settles months from now, the missing return may reflect locked capital, fees, execution risk, and rule risk rather than a free-money mistake.

    Effective edge = payout edge − fees − slippage − capital-lockup cost − settlement/rule risk
    Find the settlement date or resolution trigger.
    Estimate the maximum time capital could stay locked.
    Compare the net edge after fees and slippage to what cash could earn elsewhere over the same period.
    Check whether the market can still resolve differently from the headline because of date gates or source rules.
    Do not call it risk-free unless both settlement and timing are actually locked.
    Do not render a Treasury-rate comparison unless a fresh, sourced rate is available at build time. If no verified rate is available, keep the copy qualitative.

    Three ways to classify the spread

    Most comparison traffic lands in the first two buckets, not the last one.

    Same headline, different contract

    One market asks whether something happens by June 30. Another asks whether it happens during June. The price gap is not pure arbitrage.

    Same event, different resolution source

    One market resolves on AP call, another on certification. The gap reflects settlement timing and source risk.

    Closer to true arbitrage

    Only when wording, timing, source, and fees line up does the spread begin to look like real arbitrage.

    Related tools and explainers

    Use these when you need the deeper why behind the mismatch you just found.

    Run the 30-second parity triage before calling a spread arbitrageRead the full arbitrage explainerWhy markets disagree on the same eventCompare contract wording trapsWhy settlement sources differCompare contract settlement modelsKalshi vs Polymarket overview

    FAQ

    The short version: evaluate the contract before you evaluate the screenshot.

    Keep these two disclaimers in your head

    • Visible price gaps do not guarantee risk-free arbitrage.
    • This page is an evaluation framework, not trading advice.