Cross-Market Political Arbitrage with Fractional Kelly

This strategy, implemented in the 'arbiter' bot, scans for price inconsistencies across multiple related Polymarket political markets (e.g., candidate A winning nomination vs. winning presidency). It identifies no-arbitrage violations where the combined probabilities of mutually exclusive events do not sum to 1. Entry occurs when a risk-free profit opportunity is detected after accounting for fees and slippage. Position sizing uses fractional Kelly criterion to manage risk and maximize long-term growth while preventing overbetting. Exit is automatic as the arbitrage closes or upon expiration. The bot enforces a strict rule: it will not trade unless a backtested out-of-sample edge exists, ensuring statistical reliability. It is currently paper-trading by default, prioritizing survival over profit during the validation phase.