Zero Alpha Signal Hedged Arbitrage

When alpha signals are zero but strategies remain active, it indicates pure market-making or latency exploitation rather than directional bets. This strategy identifies pairs of highly correlated markets (e.g., over/under on the same event) where bot quotes automatically rebalance. The edge: bots without alpha generate mechanical quotes—these can be arbitraged by placing limit orders against stale quotes when identical events have slight price discrepancies. Entry: simultaneously buy the cheaper side and sell the expensive side across two markets on the same question. Exit: when spread converges below transaction costs or at event resolution. Implementation requires low-latency access to Polymarket's order books. Success rate depends on maintaining sub-second execution.