Arbitrage
Arbitrage is a strategy that seeks to exploit pricing inconsistencies between economically related positions in a way designed to reduce or eliminate exposure to the underlying directional outcome.
Why it matters to you
Prediction markets can occasionally contain prices that appear inconsistent across: YES and NO contracts, multiple outcomes, related markets, or different venues. However, an apparent arbitrage is not automatically risk free. Traders must consider: execution, fees, liquidity, contract wording, resolution differences, settlement timing, platform risk, and the possibility that the contracts are not truly equivalent.
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