Advanced concept
Prediction Market Arbitrage Explained
A conservative educational explanation of price differences across markets and why apparent arbitrage is often harder than it looks.
Educational note: This article explains market structure and probability reading. It is not financial, legal or trading advice.
What people mean
Arbitrage usually refers to price differences that appear to allow a low-risk combined position. In prediction markets, rule differences often break the simple math.
Why it is hard
- Different resolution rules.
- Fees, spreads and withdrawal costs.
- Position limits and liquidity.
- Timing and settlement risk.
- Jurisdiction and platform availability.
Educational takeaway
If two markets seem inconsistent, first compare wording and resolution sources. Apparent gaps are often compensation for hidden differences.
Reader checklist: compare the market wording, price, liquidity and resolution source before treating any probability as meaningful.
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