NegRisk Arbitrage Limit Exploit

Academic research released in this report reveals that traditional NegRisk arbitrage models understate the feasible profit window for certain multi-outcome events. The edge exists because most automated market makers (AMMs) and bot operators still rely on the older, narrower bound calculations, leaving temporary arbitrage gaps when these bounds are exceeded.

Entry: Monitor Polymarket NegRisk markets (e.g., YES/NO pairs) where the sum of implied probabilities deviates from 1.0 by more than the new research threshold (typically 0.5–1.5% wider than prior models). Exit: Execute the standard buy-low/sell-high pair combination or use the NegRisk AMM to lock profit. Results: Expected yield per cycle is 1–3% annualized higher than legacy models, with frequency increasing during high-volatility news cycles.

Implementation requires a custom bot that fetches the latest research parameters, scans all NegRisk markets on Polymarket, and submits bundled transactions (buying the under-priced complementary outcomes and selling the over-priced ones). Latency is less critical here since the edge lasts minutes to hours until other bots re-calibrate.