Regulatory impact short
Shorts political-risk-related prediction markets when regulatory news (like Spain blocking access) creates temporary panic selling, then buys back on overreaction.
The report title 'Spain kills Polymarket access' signals a geopolitical event that caused liquidity shocks and market dislocations. Strategy: when a country bans or restricts Polymarket, the most affected event contracts (e.g., elections, international conflicts) see irrational sell-offs as retail users flee. Entry: short these contracts (buy NO) if implied probability of YES drops more than 10% without fundamental news change. Exit: buy back YES after 24-48 hours when arbitrageurs rebalance. Results: high win rate but tail risk of real fundamental change. Implementation: news scraping for regulatory announcements, monitor volume spikes, use events with clear binary outcomes.