How to Arbitrage Polymarket and Kalshi
Cross-venue arbitrage between Polymarket and Kalshi consistently produces 1-5% risk-free edges when the same underlying event is mispriced on both venues. The math is simple — implied probabilities should sum to ≤100% for arbitrage to exist — but execution is hard because spreads close fast. This guide covers identification, sizing, and execution either manually or via PredictEngine automation.
Step-by-Step
- 1
Identify markets that exist on both venues
Common candidates: presidential election markets, Fed-rate decisions, weather (Polymarket lacks these but Kalshi has them), major sports events. NOT good candidates: Polymarket-only crypto markets, Kalshi-only economic indicators.
- 2
Calculate the implied edge
If YES on Polymarket trades at 55¢ and NO on Kalshi trades at 42¢, combined = 97¢ for guaranteed $1 payout = 3¢ edge ($0.03 / $0.97 = 3.1% return). Account for trading fees on each venue (Kalshi ~$0.02-0.07/contract, Polymarket 0% trading but 2% withdraw).
- 3
Pre-fund both venues
For instant execution, you need capital on both Polymarket (Polygon USDC) and Kalshi (USD via ACH). PredictEngine handles the funding split automatically when you set your target arb size.
- 4
Place both legs simultaneously
Manually: open both browser windows, queue both orders, fire as close to simultaneously as possible. Risk: by the time leg 2 fires, the spread may have closed. Automated via PredictEngine: sub-second execution on both legs with reverse-on-partial logic.
- 5
Hold to resolution or close early
If both legs fill, you're locked into guaranteed profit. You can hold to resolution OR close the position early on whichever venue offers better exit liquidity. PredictEngine recommends holding unless the unrealized gain hits 90%+ of max profit.
Skip the manual work
PredictEngine automates this entire flow. Free plan, no credit card.
Try PredictEngine free →Further Reading
- Sports Prediction Markets in 2026: Best Approaches Compared
- Trader Playbook: Prediction Market Arbitrage Step by Step
- Small Portfolio? Master Cross-Platform Prediction Arbitrage
- Automating Senate Race Predictions for Arbitrage Profits
- Polymarket Trading for Beginners: Master Arbitrage Fast
- Cross-Platform Prediction Arbitrage: A Guide for Institutions
- Trading Psychology & Order Book Secrets for Arbitrage Wins
- Top Prediction Market Arbitrage Mistakes With a $10K Portfolio
Frequently Asked Questions
How profitable is Polymarket-Kalshi arbitrage?
Active arb-runners report 5-15% monthly returns on capital with sub-3% drawdowns. Returns scale linearly with capital up to the liquidity ceiling on Kalshi (which fills first; Polymarket usually has more depth).
Is arbitrage legal on Polymarket and Kalshi?
Yes. Both venues permit arbitrage in their terms of service. It's a normal market-making activity. The only legal risk is US accessibility of Polymarket (Kalshi is fully US-legal).
Why doesn't every trader arbitrage?
Three barriers: capital (need funds on both venues), speed (manual execution misses 80% of opportunities), and infrastructure (you need a scanner). PredictEngine collapses all three into one signup.
What's the biggest risk in cross-venue arb?
Execution slippage — one leg fills, the other doesn't, and you're left with directional exposure. PredictEngine's reverse-on-partial logic eliminates this: if leg 2 doesn't fill within 2 seconds, leg 1 is auto-unwound at the next available price.