polymarket

Polymarket Trading Skill

Trade prediction markets and profit from your knowledge directly from Clawdbot.

Overview

This skill helps you:

• Understand Polymarket mechanics
• Find profitable trading opportunities
• Analyze market odds and sentiment
• Track positions and P&L
• Build automated alerts and strategies
• Prepare for the upcoming POLY distribution

What is Polymarket?

Polymarket is a decentralized prediction market platform where you trade shares representing outcomes of real-world events. If your prediction is correct, shares pay out $1. If wrong, they're worth $0.

Example: "Will it rain tomorrow?"

YES shares trading at $0.65
NO shares trading at $0.35

If you buy YES at $0.65 and it rains:
- You receive $1.00
- Profit: $0.35 (54% return)

If it doesn't rain:
- Shares worth $0.00
- Loss: $0.65

Getting Started

1. Setup Account

1. Visit polymarket.com
2. Connect with email or Web3 login
3. Deposit USDC (Polygon network)
4. Start trading

2. Understanding Shares

Each market has YES and NO shares
- Prices always sum to ~$1.00
- Price = implied probability
- $0.70 YES = 70% chance according to market

You can:
- Buy YES (bet it happens)
- Buy NO (bet it doesn't)
- Sell anytime before resolution

Polymarket API

Base URL

https://clob.polymarket.com
https://gamma-api.polymarket.com

Get Active Markets

# List all active markets
curl -s "https://gamma-api.polymarket.com/markets?closed=false&limit=100" | jq '.[] | {question, slug, outcomePrices}'

Get Market Details

# Get specific market by slug
SLUG="will-trump-win-2024"
curl -s "https://gamma-api.polymarket.com/markets?slug=$SLUG" | jq '.[0]'

Get Market by Condition ID

CONDITION_ID="0x..."
curl -s "https://gamma-api.polymarket.com/markets?condition_id=$CONDITION_ID" | jq

Search Markets

# Search by keyword
curl -s "https://gamma-api.polymarket.com/markets?tag=politics&closed=false" | jq '.[] | {question, outcomePrices}'

Get Order Book

# CLOB API for order book data
MARKET_ID="your-market-id"
curl -s "https://clob.polymarket.com/book?market=$MARKET_ID" | jq

Get Trade History

# Recent trades for a market
curl -s "https://clob.polymarket.com/trades?market=$MARKET_ID&limit=50" | jq

Market Categories

🏛️ Politics

- Elections (US, global)
- Policy decisions
- Legislation outcomes
- Government actions
- Geopolitical events

⚽ Sports

- Game outcomes
- Championship winners
- Player performance
- Transfer rumors
- Season records

💼 Business

- Earnings reports
- Product launches
- M&A activity
- IPO timing
- Executive changes

🎬 Entertainment

- Award shows
- Box office performance
- TV ratings
- Celebrity events
- Streaming numbers

🌡️ Science & Weather

- Climate data
- Space missions
- Scientific discoveries
- Natural events
- Health/pandemic

📈 Economics

- Fed rate decisions
- Inflation data
- Employment numbers
- GDP reports
- Market indices

Trading Strategies

1. Information Edge

Strategy: Trade when you have better information than the market

Examples:
- Local knowledge (weather, events)
- Industry expertise
- Early access to data
- Research skills

Process:
1. Find market where you have edge
2. Assess if price reflects your info
3. Size position based on confidence
4. Monitor for new information

2. Arbitrage

Strategy: Exploit price discrepancies

Types:
- Cross-platform (Polymarket vs Kalshi)
- Related markets (correlated outcomes)
- Yes/No mispricing (should sum to $1)

Example:
Market A: "Team wins championship" = $0.40
Market B: "Team makes finals" = $0.35

Arbitrage: Can't win championship without making finals
Action: Buy "makes finals" if you believe championship odds

3. Momentum Trading

Strategy: Follow price trends

Signals:
- Rapid price movement
- Volume spikes
- News catalysts
- Social sentiment

Process:
1. Identify trending markets
2. Confirm with volume
3. Enter with trend
4. Set stop-loss
5. Exit when momentum fades

4. Mean Reversion

Strategy: Bet on overreactions correcting

When to use:
- Sharp moves on minor news
- Emotional/sentiment driven spikes
- No fundamental change

Example:
- Celebrity rumor moves market 20%
- Rumor debunked
- Price should revert

5. Event-Driven

Strategy: Trade around scheduled events

High-impact events:
- Election days
- Earnings releases
- Fed meetings
- Court decisions
- Sports games

Process:
1. Calendar upcoming events
2. Assess current pricing
3. Position before event
4. Or wait for live trading opportunities

Position Sizing

Kelly Criterion

Optimal bet size = (bp - q) / b

Where:
b = odds received (decimal - 1)
p = probability of winning (your estimate)
q = probability of losing (1 - p)

Example:
- Share price: $0.40 (market says 40%)
- Your estimate: 60% chance
- Potential profit if win: $0.60 per share

b = 0.60 / 0.40 = 1.5
p = 0.60
q = 0.40

Kelly = (1.5 × 0.60 - 0.40) / 1.5
Kelly = (0.90 - 0.40) / 1.5
Kelly = 0.33 (33% of bankroll)

Most traders use fractional Kelly (25-50%) for safety

Risk Management Rules

Conservative:
- Max 5% per position
- Max 20% correlated exposure
- Always have exit plan

Moderate:
- Max 10% per position
- Max 30% correlated exposure
- Use stop-losses

Aggressive:
- Max 20% per position
- High conviction trades only
- Accept higher variance

Analysis Framework

Market Efficiency Check

# Questions to ask:

1. Why is this mispriced?
   - Information asymmetry?
   - Emotional trading?
   - Low liquidity?

2. What does the market know that I don't?
   - Check news sources
   - Review trading history
   - Analyze large positions

3. What's my edge?
   - Unique information?
   - Better analysis?
   - Faster reaction?

Probability Assessment

Base rate analysis:
1. Find historical frequency
2. Adjust for current context
3. Compare to market price
4. Identify gaps

Example: "Will Company X beat earnings?"
- Historical beat rate: 75%
- Current conditions: Strong sector
- Analyst sentiment: Positive
- Your estimate: 80%
- Market price: $0.65 (65%)
- Gap: 15 percentage points
- Action: Consider buying YES

Liquidity Analysis

# Check order book depth
curl -s "https://clob.polymarket.com/book?market=$MARKET_ID" | jq '{
  best_bid: .bids[0],
  best_ask: .asks[0],
  bid_depth: .bids | length,
  ask_depth: .asks | length
}'

Good liquidity indicators:
- Tight spread (<$0.02)
- Deep order book (>$10k each side)
- Active trading (>100 trades/day)

Poor liquidity warnings:
- Wide spread (>$0.05)
- Thin book (<$1k depth)
- Few recent trades

Monitoring & Alerts

Price Alert Script

#!/bin/bash
# Monitor market price and alert on threshold

MARKET_SLUG="your-market-slug"
THRESHOLD_HIGH=0.70
THRESHOLD_LOW=0.30
CHECK_INTERVAL=60

while true; do
  PRICE=$(curl -s "https://gamma-api.polymarket.com/markets?slug=$MARKET_SLUG" | \
    jq -r '.[0].outcomePrices | fromjson | .["Yes"]')
  
  ALERT=""
  if (( $(echo "$PRICE > $THRESHOLD_HIGH" | bc -l) )); then
    ALERT="HIGH: $MARKET_SLUG at $PRICE"
  elif (( $(echo "$PRICE < $THRESHOLD_LOW" | bc -l) )); then
    ALERT="LOW: $MARKET_SLUG at $PRICE"
  fi
  
  if [ -n "$ALERT" ]; then
    echo "[$(date)] $ALERT"
    # Add notification here (telegram, email, etc)
  fi
  
  sleep $CHECK_INTERVAL
done

Portfolio Tracker

#!/bin/bash
# Track multiple positions

POSITIONS=(
  "market-slug-1:YES:100"
  "market-slug-2:NO:50"
)

echo "=== Portfolio Status ==="
echo "Date: $(date)"
echo ""

TOTAL_VALUE=0

for pos in "${POSITIONS[@]}"; do
  IFS=':' read -r SLUG SIDE SHARES <<< "$pos"
  
  DATA=$(curl -s "https://gamma-api.polymarket.com/markets?slug=$SLUG")
  QUESTION=$(echo $DATA | jq -r '.[0].question')
  PRICES=$(echo $DATA | jq -r '.[0].outcomePrices | fromjson')
  
  if [ "$SIDE" == "YES" ]; then
    PRICE=$(echo $PRICES | jq -r '.["Yes"]')
  else
    PRICE=$(echo $PRICES | jq -r '.["No"]')
  fi
  
  VALUE=$(echo "$SHARES * $PRICE" | bc)
  TOTAL_VALUE=$(echo "$TOTAL_VALUE + $VALUE" | bc)
  
  echo "Market: $QUESTION"
  echo "Position: $SHARES $SIDE @ \$$PRICE = \$$VALUE"
  echo ""
done

echo "=== Total Portfolio Value: \$$TOTAL_VALUE ==="

New Market Scanner

#!/bin/bash
# Find newly created markets

curl -s "https://gamma-api.polymarket.com/markets?closed=false&limit=50&order=startDate&ascending=false" | \
  jq '.[] | {
    question: .question,
    created: .startDate,
    volume: .volume,
    liquidity: .liquidity,
    yes_price: (.outcomePrices | fromjson | .["Yes"])
  }'

POLY Distribution Preparation

Expected Timeline

- Status: Confirmed Q1-Q2 2026
- US market relaunch completed
- Distribution to active traders

Qualifying Activities

High Value:
✓ Trading volume (most important)
✓ Number of markets traded
✓ Unique active days
✓ Early market participation
✓ Liquidity provision

Medium Value:
✓ Account age
✓ Consistent activity
✓ Diverse categories

Low/Unknown:
? Referrals
? Social engagement
? Winning percentage

Optimization Strategy

Weekly targets:
□ Trade in 5+ different markets
□ $500+ weekly volume
□ Activity on 5+ unique days
□ At least 1 trade in new market
□ Mix of categories (politics, sports, etc)

Monthly review:
□ Total volume trending up
□ Market diversity maintained
□ No suspicious patterns
□ Consistent engagement

Risk Factors

Market Risks

⚠️ Resolution Risk
- Ambiguous outcomes
- Disputed results  
- Delayed resolution

⚠️ Liquidity Risk
- Can't exit large positions
- Slippage on trades
- Illiquid markets

⚠️ Information Risk
- Late/wrong information
- Market manipulation
- Insider trading

Platform Risks

⚠️ Smart Contract Risk
- Potential vulnerabilities
- Bridge risks (Polygon)

⚠️ Regulatory Risk
- US restrictions (now resolved)
- 

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