An Easy Rule

The easiest way to check for arbitrage is to add the prices of all possible outcomes for a given event, and if the aggregated price is less than $1, you have an arbitrage opportunity. For example, let's say that the "Yes" contract for Gavin Newsom as the 2028 Democratic presidential nominee is trading on Kalshi at 31¢ and Polymarket at 36¢ — that's a pretty big gap. And let's say that the "No" contract is trading at 65¢ on Polymarket.

All possible outcomes for Gavin Newsom as the 2028 Democratic presidential nominee are either "Yes" or "No", so let's add up the prices. 31¢ + 65¢ is 96¢, which is less than $1, so we have an arbitrage opportunity here.

The Math

Not convinced? Well, here's the math to prove this out. Let's say you buy a "Yes" share at Kalshi for 31¢ and a "No" share at Polymarket for 65¢.

  1. If Gavin wins the nomination in 2028, you win 69¢ on Kalshi since your 31¢ "Yes" share becomes $1, and you lose 65¢ on Polymarket since your "No" share is now worth nothing. 69¢ − 65¢ is 4¢ which means you win 4¢ if Gavin wins the nomination in 2028.
  2. If Gavin loses the nomination in 2028, you win 35¢ on Polymarket since your 65¢ "No" share becomes $1, and you lose 31¢ on Kalshi since your "Yes" share is now worth nothing. 35¢ − 31¢ is 4¢ which means you win 4¢ if Gavin loses the nomination in 2028.

Essentially, you win 4¢ regardless of what happens. Given that you've invested 96¢ and are guaranteed 4¢, you're getting a risk‑free 4.16% return.

The Risks

This all works great in theory, but in practice, there's a bunch of different factors that you should check for since these variables can eat into that risk free return.

  1. Confirm it's the same outcome. Ensure that both markets resolve to exactly the same contract (same event scope, same resolution rules, same timeline). Small wording differences can make them different assets.
  2. Check liquidity & depth. Look at order book depth on both markets. Can you buy the "Yes" shares that you want at 31¢ on Kalshi and buy the "No" shares at 65¢ on Polymarket without moving the price? If not, adjust for slippage.
  3. Calculate exact fees now. Use the Prediction Hunt calculator to get a sense of the fees on each platform. But for the latest, look up current fee schedules on the websites of the relevant platforms.
  4. Execute both sides as close to simultaneously as possible. If one side fills and the other doesn't, you're exposed to directional risk. It might be a good idea to use limit orders to minimize the risk here.
  5. Don't forget about taxes. Log every trade for audit/tax. Record timestamps, sizes, prices, and fees so you can compute actual net profit and report correctly.