Cross-Election Market Arbitrage

This quant bot applies a process-first approach to Polymarket's political markets, specifically targeting cross-market arbitrage opportunities. It scans for violations of the no-arbitrage principle between related election markets (e.g., candidate A winning vs. candidate A winning a specific state). If the implied probabilities create a risk-free profit opportunity, the bot executes trades.

Entry: The system continuously calculates implied probabilities across all linked political markets. When it finds a combination of YES/NO positions that guarantees a profit regardless of outcome (a no-arbitrage violation), it enters the trade. Sizing is determined by the fractional Kelly Criterion to maximize long-term growth while avoiding overexposure.

Exit: Positions are held until the election results are settled. The bot refuses to trade unless it has a backtested out-of-sample edge, emphasizing survival over profit. It currently runs in paper-trading mode.