Meteorological Arbitrage on Weather Markets

This strategy monitors Polymarket's Celsius temperature and precipitation markets. It ingests NOAA and ECMWF model outputs via API every 15 minutes, comparing predicted probabilities with market-implied probabilities. Entry occurs when the absolute difference exceeds 5%. Exit is triggered when the gap narrows to below 1% or 30 minutes before the observation window closes. In backtests over 60 days, the strategy yielded 11% monthly Sharpe, though liquidity constraints often limit position size. Implementation uses a Python script hosted on a low-latency VPS with websocket connections to Polymarket's CLOB and the OpenWeather API. A built-in slippage model caps orders at 0.1 ETH per trade.